World Economic Forum Meeting in Addis Ababa

The 22^nd World Economic Forum for Africa 2012 officially opened yesterday in Addis Ababa with its 1^st Plenary Session in presence of Heads of State and Government, and eminent international personalities, civil society, academic and media personalities and hundreds of business leaders. The forum, May 9^th to 11^th, has been holding panel discussions on different themes throughout the two days. The theme selected for the Forum is “Shaping Africa’s Transformation”, for consideration under the three main pillars of “Strengthening Africa’s Leadership”, “Accelerating Investment in Frontier Markets”, and “Scaling Innovation for Shared Opportunities.”

Ethiopia was selected as host nation at the 21^st forum held in Cape Town last year. Apart from the fact that Ethiopia is becoming a major conference centre for global and continental organizations, the choice was also determined by Ethiopia’s fast growing economy which according to an IMF study, was first among the continent’s non-oil economies. Equally, the meeting comes at a time when Africa is on the brink of a real transformation as the home of seven of the world’s ten fastest growing economies. It compares favorably with the relative problems of the rest of the global economy, and one of the main foci of the forum is on the key issues that can further encourage Africa’s growth and unleash its potential.

Prior to yesterday’s official opening there was an award-giving ceremony for “Social entrepreneurs of the year 2012”. The award was given to five African social entrepreneurs for implementing innovative solutions to social and environmental problems with financially sustainable models. The awards were presented to Bethelihem Tilahun, co-founder and manager of SoleRebels, Ethiopia; Sameer Hajee, Chief Executive Officer, Nuru Energy Group, Rwanda; Paul Scott Matthew, Director Africa, North Star Alliance, South Africa; Andrew Muir, Executive Director, Wilderness Foundation, South Africa; and Seri Youlou and Thomas Granier, co-Founders, Association la Voute Nubienne, Burkina Faso. The awards were presented by Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum. The event was followed by a panel discussion under the theme “Africa’s innovators”, where those given awards took part in a discussion moderated by Olanrewaju Akinola, Editor of This is Africa of the UK’s Financial Times. The discussion focused on how to encourage entrepreneurs in Africa, the problems hindering innovation in Africa and possible solutions. The group shared their experiences and discussed the role of innovation in transforming Africa’s economy.

One panel was held under the theme “Africa in the World Economy — From Tigers to Lions?” with panellists Gao Xiqing, President of the China Investment Corporation (CIC) ; Bekele Geleta, Secretary-General, International Federation of Red Cross and Red Crescent Societies (IFRC); Monhla Hlahla, Chairperson, Industrial Development Corporation of South Africa; Donald Kaberuka, President, African Development Bank; Doug McMillon, President and Chief Executive Officer, Wal-Mart International; all co-chairs of the Forum.

Mr. Kaberuka noted the importance of not confusing economic growth with economic transformation. He said the structure of African economies was not changing fast enough. Countries remained vulnerable to external shocks. Public policy choices should target ways to leverage wealth from natural resources for broad-based, sustainable development. He emphasized the importance of education of children of the poor as a tool to address generational change, and of the development of small and medium enterprises to close the wealth gap as two key drivers for Africa’s transformation. Kofi Anan, former UN Secretary General similarly indicated that “government policies need to create equal access to opportunities to avoid dissatisfaction in the future.” Referring to the dismal economic conditions of many Africans, he said, “We cannot talk of growth when millions of people are left behind”. Overall the panellists agreed on the need to ensure all-inclusive economic growth and underscored the imperative for Africa to chart its own future development as well as underlining the need to prioritize economic transformation to end poverty.

Other panels have dealt with the themes of “Advancing Africa’s trade”, “African Agriculture”, “African Leadership”, ‘Accelerating Infrastructure Investments” and “Rethinking South-South Relations” in which the discussion primarily centered on ways to improve south-south relations and with the question as to the effect this relationship may have on Africa and the growing southern economies of India, China and Brazil. “Advancing Africa’s trade” was moderated by Jim Fredrick, editor of Time International, USA and the discussions emphasized myriad bottlenecks including inadequate or non-existent infrastructure, lengthy complex procedures, inefficient border administrations and regulatory discrepancies that hampered trade and economies of scale, and, more recently, the tightening of trade finance. This in particular was a problem given the new financial regulations that have been developed worldwide since the financial crisis.” Ethiopia’s Minister of Industry, Mekonnen Mayazewal, stressed the importance of expanding infrastructure and the need to diversify the economic base and reduce costs of production as important policy decisions to boost intra-Africa trade. He called on the private sector to increase productivity. Egypt’s Minister of Industry and Foreign Trade, Mohammed Eisa, also noted that the lack of harmonization of trade rules was a serious impediment to trade in Africa. Speakers all agreed that in addition to rectifying problems, there must be a transformation for Africa, to add value to the continent’s natural resources, in order to realize its potential and create economic benefits for its people.

Prime Minister Meles and President Jakaya Kikwete of Tanzania together with Fahad Bin Abdulrahman Bin Sulaiman Balghunaim, Minister of Agriculture of Saudi Arabia, participated in the panel on “African Agriculture”. Prime Minister Meles also participated in the panel on “Africa’s leadership” together with President Ali Bongo Ondimba of Gabon; President Goodluck Ebele Jonathan of Nigeria; and Prime Minister Nahas Gideon Angula of Namibia. They spoke on the challenges of leadership as Africa prepared to move forward to meet the complex issues of today and tomorrow. The discussion was moderated by Klaus Schwab. The panellists agreed that Africa’s leadership needed honesty, vision, clear priorities, responsibility, accountability and perseverance. These were the characteristics necessary for leadership today and would be required to lead Africa’s transformation from growth into shared opportunities for sustainable development and progress over the next 20 years. Prime Minister Meles underlined the  importance attached to decision-making leadership qualities, and said a leader must be prepared to say “no” when a decision is not in the long-term interest of the country or the continent. A leader must be aware that he cannot please everybody all the time .He went on to add that “Africa needs leadership with clear plans and priorities to overcome structural problems focusing exclusively on [inclusive] economic growth. We need leadership with perseverance to continue on the chosen path when the going gets rough. And if there is going to be transformation, the going will get rough.” President Jonathan emphasized on rule of law, pointing out that leaders should not be above the law.

Source:http://www.mfa.gov.et/Press_Section/Week_Horn_Africa_May_11_2012.htm#1

Ethiopia's manufacturing industry on the rise

Ethiopia is taking advantage of rising wages in Asia, and its own natural advantages in agriculture and cattle-raising, to build a light-industry base that is being kickstarted by foreign investment.

Saygin Dima Textile Share Company, a joint venture between Turkish company Saygin and Ethiopia’s Privatisation and Public Enterprises Supervising Agency, began operations at its new fibre and fabric plant in Oromia in March. It serves as confirmation that the Ethiopian government sees the textile industry as a major part of the structural transformation from an agrarian to an industrial society.

The bottom rung of low-skilled work has long been the preserve of razor-margined Chinese manufacturers, but rapid wage inflation in Asia has raised the possibility of Africa finding a foot on the manufacturing ladder. Ethiopia’s leaders are among the continent’s most fleet-footed at attracting investment to the sector, and they are banking on ­foreign know-how and capital. Premier Meles Zenawi travelled to Istanbul in 2005 to promote Ethiopia as a land of opportunity to Turkish textile companies, which is bearing fruit today.

The model for the textile industry had already proved successful with the flower sector. By providing cheap land and credit from the Ethiopian Development Bank (EDB) to Golden Rose in 2000, the Ethiopian government helped to kickstart the country’s floriculture sector. The demonstration effect has tempted others in, to create a sector worth more than $200m in 2010.

The relationship between growers and textile manufacturers has gone sour since the export ban was imposed

Likewise, Turkey’s Ayka Textile has enjoyed special treatment as a role model to attract others in an effort coordinated by the Ethiopian Investment Agency, EDB and Oromia regional government. Ayka has invested $95m in the country’s largest factory, which was built on 15,000m³ some 18km west of the capital and began full-scale production in 2010.

Resounding Success

Ayka Addis finance manager Amare Teklehimanot explains that the five-year tax break and help finding land and credit helped to attract the Turkish company. Results have been encouraging, with regular exports of woven products and garments to Germany, Italy, Greece and Cameroon. The three processing departments – spinning, knitting and weaving – have a combined capacity to process 43,000tn of cotton per year. Turnover in the first year was $3.6m, 70% of the target. By the 2010/2011 season, it had risen to $36m, outstripping predictions by 135%.

The government hopes to build on this success, and it has targeted an additional 46 textile projects worth $2.5bn through the Growth and Transformation Plan, of which the Saygin Dima plant is one. They include cotton ginneries, and spinning, knitting, weaving and finished garment factories.

Linkages in the textile industry are critical to keep costs down. One constraint has been the lack of cotton. Indian textile giant Spintex has invested $70m in its factory at Kombolcha and 2,500ha of cotton growing areas. It has used fast-maturing ­hybrid varieties and hopes to export two containers of cotton each day. It will also supply 1,200tn of lint to local companies – including Ayka Addis, with which it has signed a memorandum of understanding.

The hand of developmental state is never far away from the industry. When high cotton prices threatened to leave local mills without raw materials in 2011, the government placed a cap on exports. This situation is a problem faced by many African countries that plan to add value when commodity prices are high. In Nigeria, for instance, the Petroleum Investment Bill is needed to guarantee a gas supply for local users like power stations and fertiliser factories when gas producers can sell more profitably abroad.

But market interventions are not always a success. Berhane Gedey, owner of Bazel Agricultural Plc, a local cotton producer, told reporters “The relationship between growers and textile manufacturers has gone sour since the export ban was imposed.” The cap has since been lifted as international prices fell in late 2011.

There are also plans to take advantage of Ethiopia’s cattle herd, one of Africa’s largest at some 49.2m animals. Chinese investors have been active in the leather sector for several years now, but fears that local manufacturers would be forced out of business have proved unfounded according to Deborah Brautigam, author of The Dragon’s Gift. Instead they have improved and modernised their processes and equipment.

In a clear example of how Ethiopia is plugged into the global economic tilt towards Asia, China’s Huajian International Shoe opened a shoe factory in January with financing from the China-Africa Development Fund. Employing 600 people in a light manufacturing zone, it became Ethiopia’s largest manufacturer of ­women’s shoes in one stroke.

Local tanner and leather wholesaler Dire Industries is also producing shoes at its Peacock factory in Dire Dawa. Speaking at the All-African Leather Fair in March, Dire Industries’s general manager Biniam Bedada outlined the challenges to the sector: the lack of raw materials, power outages and delays to imports.

Textile manufacturers face similar issues even as the cotton sector looks to be heading for a sharp expansion. Before the sector can take off, there will need to be “the ecosystem of suppliers, those who make the buttons or the zips”, as well as the integrated supply chain from field to fibre to fashion, according to Ernst & Young Ethiopia head Zemedeneh Negatu. “The other challenge is that even if the factory cost is competitive, once it leaves the gate the transaction costs are high,” Negatu explains. The Ethiopian government’s focus on infrastructure bodes well for the medium term, but this means investors have to have longer horizons.

As Hinh T. Dinh, lead author of a World Bank report on Africa and light manufacturing released in March, says, “Africans do not have to wait for perfect investment climates to create millions of productive jobs in light manufacturing.”

Source:http://www.theafricareport.com/index.php/east-horn-africa/ethiopia-s-industrial-web-stitch-by-stitch-501811324.html

With agriculture providing 70% of employment and 30% of GDP in Africa, on average, Africa’s well-being is closely tied to its agriculture sector – for better or worse.

Now, however, a new sense of optimism is emerging. The rapid growth of African economies and growing global demand for food is bringing new focus and momentum into African agriculture. Helping Africa to grow more food won’t solve the immediate crises but it can reduce the likelihood of future ones.

African agriculture holds tremendous untapped potential – the continent could dramatically increase its production of food for both domestic consumption and export. But developing that potential will require investment and commitment from both the public and private sectors.

The public sector has launched a number of initiatives, at global and regional level, to mobilize greater planning and investment in African agriculture. However, increasing private-sector investment across the board, in a sustainable and responsible manner, remains a challenge.

This week in Addis Ababa, African and global leaders will take a step toward ensuring that Africans are in the driver’s seat when it comes to bringing sustainable investment to agriculture. At the Grow Africa Investment Forum, jointly hosted by the African Union, NEPAD and the World Economic Forum, nearly 250 investors, government leaders and other stakeholders (including civil society and farmer leaders) will convene to discuss specific investment priorities in seven African countries.

Delegations from Tanzania, Mozambique, Kenya, Ethiopia, Rwanda, Ghana and Burkina Faso will present their top investment priorities.

What’s different about Grow Africa is that countries are determining their priorities for private-sector investment. The partnership provides technical support to frame these priorities in business terms and then provides a platform to engage potential investors. The partnership serves as an open, multistakeholder platform, encouraging dialogue, collaboration and mutual accountability between all stakeholders in the agriculture system.

Grow Africa represents the joining of two agendas – NEPAD’s Comprehensive African Agricultural Development Programme (CAADP), which supports African countries to develop public-sector agriculture plans; and the World Economic Forum’s New Vision for Agriculture, which links the private sector with other stakeholders to achieve food security, environmental sustainability and economic growth through agriculture.

The seven countries participating in Grow Africa will arrive in Addis this week ready to present a wide range of investment priorities, from specific commodities to growth corridors. All of them place a strong priority on providing opportunities to smallholder farmers and small-scale entrepreneurs, who make up the majority of Africa’s agricultural producers and traders.

What does the private sector think about this? Many in the sector are intrigued and excited, preparing specific investment offers and talking to local partners. We are optimistic that real commitments to sustainable investment will come out of these discussions.

We look forward to updating you on the results of this and other efforts to contribute to a healthy, prosperous and sustainable future for African communities.

Lisa Dreier is Director of Food Security and Development Initiatives at the World Economic Forum USA. For more information, visit our websites at http://www.weforum.org/agriculture or http://www.growafrica.com.

Ethiopia is one of the poorest countries in the world and has faced enormous challenges feeding its people and providing critical health services to mothers and their children. Yet, I returned from a recent visit excited about advances the country is making in agriculture and health.

If these innovations—which are a top priority for our foundation—succeed, they can be replicated in other African countries that also face big challenges in health and agriculture.

One factor in Ethiopia’s progress is Prime Minister Meles Zenawi and his leadership team, who have played a key role in reinventing the country’s agricultural and health systems. Making changes to either would be a big challenge in any country, so it’s even more impressive in Ethiopia, which has the second largest population of any country in Africa but a limited economic infrastructure.

Around 85 per cent of the country’s population survives by growing crops on small plots of less than five acres. But frequent droughts and soils that have been depleted of nutrients often led to low crop yields and considerable food insecurity. More than half of the country’s population of 83 million is malnourished and more than 5 million households receive food aid each year.

Our foundation has been working with the Ministry of Agriculture, the county’s new Agricultural Transformation Agency, and other partners to help farmers’ plant higher-yielding, drought-tolerant seeds, improve soil health and fertility, and get higher prices for their crops by selling to global markets.

At the Melkassa Research Station, one of 13 government-run agricultural outposts, Dr. Markus Walsh, Sr. showed me a new, state-of-the-art technology called NIR spectroscopy that’s part of a digital revolution in agriculture. This portable device, which quickly and cheaply analyses soil conditions, is a fantastic breakthrough that will help farmers everywhere. But it’s especially valuable in countries like Ethiopia, where farmers haven’t been able to afford laboratory tests but need to know how to amend soils to grow better crops. The spectroscopy is part of an even bigger agricultural digital information system that will provide a comprehensive and detailed map of soil properties across the country.

I also met with a number of farmers to talk about new varieties of sorghum (a grain) and beans they are growing. Beans are very important because they provide protein and people need a combination of protein and grain to have a reasonable diet.

Helping small farmers sell their crops in world markets is another important part of the work we’re supporting in Ethiopia. It’s currently a big challenge because poor farmers may not be growing the right crops for world markets and they often lack the roads, trucks, and other infrastructure necessary to enable exports. And getting foreign investors to help build this “value chain” can be difficult. But I visited one agricultural processing facility called ACOS that is processing and shipping a variety of beans to European markets. It is jointly owned by an Italian company and Ethiopian investors and is a great example of private investment in developing countries.

What Ethiopia is doing in health is really a model system because it reaches everyone in the country. I visited the Germana Gale Health Post, where I talked to several of the more than 30,000 health extension workers who have been trained in recent years to deliver basic health education, prevention, and treatment. Most of the health workers are women, and those I met were energetic and well-trained.

These kinds of primary health services—giving vaccines, educating women about family health, and promoting hygiene and environmental sanitation—is the foundation for building good health systems in poor countries. Ethiopia’s health system also includes district health centers like the Dalocha Health Center I visited. There, they do a little bit of surgery and have more expertise and a wider variety of drugs. There are also primary hospitals that focus on higher level treatment and some emergency surgery, and general hospitals that deal with serious emergencies and high-risk and specialized care.

Ethiopia still faces some big problems. But the people I met and what I saw re-energized me and increased my optimism that the big investments we and other donors are making in health and agriculture will pay off for the people of Ethiopia and can serve as model activities in other African countries. Improving agricultural productivity and the quality of life through better health services is the key to unleashing the potential of Ethiopia and other poor countries and getting them on the road to self-sufficiency.

Source: http://www.thegatesnotes.com/Topics/Development/Ethiopia-Exciting-Innovations-in-Agriculture-and-Health

Source : http://www.newsdire.com/news/3050-ethiopia-africa-is-a-continent-of-opportunities.html

Mobile Connection

KENYA  will lose its position as the country with the biggest percentage of mobile phone subscribers in the East African region to Ethiopia by 2014.

“Even though Kenya remains the largest mobile market — with about 28 million mobile subscribers in the first quarter of 2012 — the country’s share of mobile users declined from 34 per cent in 2010 to 29 per cent in the first quarter of 2012 while the Ethiopian market grew tremendously,” said a new report by South Africa’s Informa Telecoms and Media titled “Major trends and new opportunities in the East African telecoms market.”

A senior analyst at Informa, Thecla Mbongue, said the East African telecoms landscape is dominated by mobile networks — accounting for over 98 of total subscriptions — with the number of subscriptions surpassing the 100 million mark in the first quarter of this year.

In Kenya, for example, latest industry statistics released by regulator Communications Commission of Kenya (CCK) for October to December 2011, indicate that there were 28.08 million mobile subscriptions in the country, up from 26.49 million in the previous quarter — a 5.99 per cent increase.

The CCK statistics show that Kenya’s mobile penetration stood at 71.3 per cent during the period, up from 67.2 per cent in the previous period, while fixed line subscriptions recorded a drop of 20.24 per cent from 355,493 fixed lines in the previous period to 283,546 in the quarter under review, representing a fixed-line teledensity of 0.72 per cent from 0.90 per cent, recorded in the previous period.

Home of the unconnected

“However, 60 per cent of East Africans are still unconnected… the overall East African penetration rate is still below 40 per cent as at end of 2011. This results from Ethiopia, with a population of 80 million, having nearly half of the unconnected East African population,” said Mr Mbongue.

Informa statistics state that Ethiopia’s mobile telecoms industry recorded the highest growth rate in 2011 at 173 per cent, followed by Burundi with 43 per cent; Rwanda with 31 per cent; Uganda with 23 per cent; Tanzania with 20 per cent while Kenya recorded a growth of 15 per cent, much lower than the East Africa average of 31 per cent.

In terms of overall telecoms penetration (both mobile and fixed line), Kenya leads at 67 per cent, followed by Tanzania at 49 per cent; Uganda at 47 per cent; Rwanda at 42 per cent, with Burundi’s standing at 25 per cent and Ethiopia at just 17 per cent while the East Africa average is 38 per cent.

Source :http://www.theeastafrican.co.ke/news/Ethiopia+to+overtake+Kenya+in+mobile+subscriptions+numbers/-/2558/1400048/-/view/printVersion/-/a378n2z/-/index.html

PM Meles attend G-8 Meeting

Ethiopia: PM Meles Zenawi to Attend G-8 summit at Camp David in Maryland

US President Barack Obama has invited the leaders of Benin, Ethiopia, Ghana and Tanzania to take part in a session on food security in Africa at the G8 summit this month, officials said Thursday.

Obama will host the leaders of the rich nation’s club at his Camp David retreat in Maryland between May 18-19.

He has now asked Benin’s president and African Union chairman Thomas Boni Yayi, Ethiopian Prime Minister Meles Zenawi, President John Mills of Ghana and Tanzania’s President Jakaya Kikwete to join the session on food security.

Ethiopian Prime Minister Meles Zenawi is no stranger to G-8 summit having attended all summits since 2005 with the exception of the 32nd summit hosted by Russia in 2006. His first G-8 summit was in July 2005 in Gleneagles, Scotland. Since then he has attended G-8 summits in Germany, Japan, Italy, Canada and France. With a G-8 summit visit in the United States, Meles Zenawi would have attended the summits in all of the 7 industrialized nations in the past eight years.

Source: http://www.google.com/hostednews/afp/article/bdf46

Engineering Professors

Could you volunteer your engineering expertise to help others?

The international development charity VSO has launched its first recruitment drive for engineering professors to enter a volunteering programme in Ethiopia.

Brian Radcliffe OBE, director of VSO UK and a former educationalist, said: “With cut backs and job losses affecting the UK’s higher education workforce, we’re urging professionals in this sector to seriously consider taking an exciting, career enhancing and possibly life-changing break.”

Valuable experience and knowledge is needed to help train Ethiopian counterparts in universities and institutes of technology. The aim is to help equip Ethipian engineers with the knowledge required to service the industrial needs of their country and ultimately help reduce poverty.

Dr James Wheeler, a software engineer from Derbyshire volunteered as an electrical-mechanical engineer with VSO in Ethiopia’s Jimma University setting up a maintenance centre. He added: “Volunteering broadens your horizons and professional outlook. It also made my CV stand out from the competition when I returned to the UK to find a new post.”

Engineering professors from all disciplines are needed – biomedical, chemical, civil, electrical, industrial and mechanical engineering.

Successful applicants could see themselves departing in September this year or February 2013 with most posts being for two years, although some are available on a more short term basis.

Individuals are not charged for volunteering – full training, flights, insurance, accommodation and a daily allowance to cover basic costs is alo included.

For more information visit: www.vso.org.uk/events

Source: http://www.engineeringcapacity.com/news101/business-news/engineering-profs-wanted-for-ethiopia

Monday, 07 May 2012,Addis Ababa, The meeting, which will take place from 9 to 11 is hosted for the first time in Addis Ababa with the support of the Government of Ethiopia, according to the press statement the organizers distributed to the media.

Ethiopia, which is one of the world’s fastest growing economies, is home to the African Union and the United Nations Economic Commission for Africa. Thus Addis Ababa offers an exceptional opportunity to bring together pan-African and global leaders to discuss the future of the region. Under the theme Shaping Africa’s Transformation, the meeting’s agenda will integrate three pillars: Strengthening Africa’s Leadership; Accelerating Investment in Frontier Markets; and Scaling Innovation for Shared Opportunities.

“Africa is experiencing strong growth and despite the increasingly volatile global economy, African leaders are pursuing measures that will transform the region into the next global growth pole. In this context, the World Economic Forum on Africa will seek to leverage the positive political, economic and social progress of recent years by providing a true multistakeholder platform to develop new ideas and actions to achieve further sustainable, inclusive growth,” says Elsie S. Kanza, Director, Head of Africa, World Economic Forum.

Led by Prime Minister Meles Zenawi of Ethiopia and representatives from his government, other African leaders who have confirmed their participation at the meeting are: Djibouti, President Ismail Omar Guelleh; Gabon, President Ali Bongo Ondimba; Gambia, President Yahya Jammeh; Mauritius, Vice-Prime Minister and Minister of Finance and Economic Development Charles Gaëtan Xavier-Luc Duval; Namibia, Prime Minister Nahas Gideon Angula; Nigeria, President Goodluck Ebele Jonathan; Rwanda, President Paul Kagame; Tanzania, President Jakaya M. Kikwete; and Zimbabwe, Deputy Prime Minister, Arthur G. Mutambara.

In addition, leading international personalities who will be present include: Pascal Lamy, Director-General, World Trade Organization (WTO); Abdoulie Janneh, Executive Secretary, United Nations Economic Commission for Africa (UNECA); Jean Ping, Chairperson of the Commission, African Union; Gordon Brown, Prime Minister of the United Kingdom (2007-2010); Fahad Bin Abdulrahman Bin Sulaiman, Minister of Agriculture of Saudi Arabia; Beverley Oda, Minister of International Cooperation of Canada, Canadian International Development Agency (CIDA); and Rajiv J. Shah, Administrator, US Agency for International Development (USAID).

Co-chairs of the meeting are: Kofi Annan, Chairman, Alliance for a Green Revolution in Africa (AGRA) and the Africa Progress Panel (APP), Switzerland; Gao Xiqing, President and Vice-Chairman, China Investment Corporation (CIC), People’s Republic of China; Bekele Geleta, Secretary-General, International Federation of Red Cross and Red Crescent Societies (IFRC), Geneva; Monhla Hlahla, Chairperson, Industrial Development Corporation of South Africa (IDC), South Africa; Donald Kaberuka, President, African Development Bank (AfDB), Tunisia; Doug McMillon, President and Chief Executive Officer, Wal-Mart International, Wal-Mart Stores, USA; and Tidjane Thiam, Group Chief Executive, Prudential, United Kingdom.

Source : http://newbusinessethiopia.com/index.php?option=com_content&view=article&id=730:ceos-of-70-countries-to-convene-in-ethiopia-&catid=31:investement&Itemid=7

Addressing the forum, the Deputy Prime Minister defined the main strategic pillars of the country’s new Growth and Transformation Plan (GTP). These were: registering accelerated, sustainable and fair economic growth; sustaining the agriculture sector to continue to be the engine of growth over the GTP years; ensuring the industry sector plays a key role in economic development; expanding and improving the quality of economic infrastructure; fostering social development and ensuring its quality; developing capacity and enhancing good governance; and increasing the capacity and development effectiveness of women and youth. Other cross-sectoral elements of the GTP included expanding social security services, promoting population development, creating more employment opportunities, enhancing and expanding the culture industry and building a green economy.

The Deputy Prime Minister and Foreign Minister noted that every government institution had prepared short and medium term plans harmonized to the GTP targets. The Ministry of Foreign Affairs, for example, had made all necessary preparations to discharge its share of responsibility for achievement of the GTP with its priority targets sorted out and being acted on. The priorities in descending order had been identified as maximizing foreign direct investment inflows, strengthening technology transfer and technical assistance and boosting trade and image building. Low-interest loans, grants and development assistance, though important, were less relevant over the GTP period as the Government was embarking on an approach to development that depended upon sustainable and predictable sources. The Government recognized that the role of the Diaspora in achieving its priority targets was crucial. It was only with the active participation of the Diaspora that the Government could effectively promote the country’s growing investment opportunities; maximize technology transfer and technical assistance; boost its trade relations and create alternative markets to make the best of its export items and import goods at the most reasonable levels as well use the knowledge and expertise of the Diaspora most effectively for the benefit of the country.

Ato Hailemariam said a number of measures have been taken to encourage active participation by members of the Diaspora. There has been the provision of investment opportunities in labor-intensive capital investments in the country. Incentives such as tax relief, low-interest loans (7.5%), and one-stop-shop services are other measures. Anyone who wants to focus on processed and semi-processed manufacturing products are to be encouraged and loans made available for those prepared to invest in feasible projects. A lease-financing mechanism is already in place to assist people to get loans for equipment, allowing it to be used as collateral. Legal procedures to establish a “non-interest bearing bank” are also under preparation. Three kinds of saving accounts have been introduced. With the “Current Account”, any member of the Diaspora can hold up to 50,000 USD in foreign currency interest free for a few weeks. The “Saving/Deposit Account” provides for any member of the Diapsora to save a limitless amount in foreign currency for a period of 3 to 6 months with interest payable. Most importantly is the “Birr Account” which has a 10% interest rate to encourage people to save their foreign currency in Birr. This is double the interest rate offered for birr deposits in a Birr Account.

The Deputy Prime Minister noted that the introduction of the Millennium Bond was part of the Government’s plan to encourage citizens and the Diaspora to support development in a way that would mutually benefit both. The bonds offered an attractive interest rate to ensure members of the Diaspora would benefit themselves as well as contribute to development. The construction level of the Renaissance Dam had now reached 7% and it would be 13% by the end of the fiscal year. The Government was very pleased with people’s participation in buying the bonds, over 7 billion birr worth being sold in the last year. He thought there was still a huge potential market in the Diaspora and the Government would do everything possible to organize maximum contributions. The Ministry of Foreign Affairs had prepared a draft Diaspora Policy which will be made available in all Ethiopian missions abroad for discussions. The draft includes a number of mechanisms to better address the needs of the Diaspora.

During the discussion, participants raised a number of concerns. These included corruption and a lack of good governance, limited infrastructure, lengthy bureaucracy delays and the difficulty in getting loans for projects of their choice. They questioned why the Government insisted that foreigners or members of the Diaspora who had savings of over 200,000 Birr should have to notify the source. They asked when banking and insurance services would be opened for investment by the Diaspora. Other questions included a request for the establishment of a Government/Diaspora Appeal committee to be responsible for dealing with Diaspora problems and provide support where necessary. There were questions over details of the new Land Lease Proclamation; requests for duty-free privileges for the Diaspora to be reactivated, and for facilitation of Diaspora visits to the Renaissance Dam project site.

In response, officials noted that the Government was aware of effects of corruption and good governance and had put in place extensive capacity building programs to develop capacity and enhance good governance. It had now completed the registration of assets of over 27,000 government officials as part of a determined effort to reduce the level of corruption significantly. There had been significant improvement in infrastructural coverage throughout the country in a remarkably short time. Equally, one of the main pillars of the GTP is expanding and improving economic infrastructure. Over bureaucratic delays it was noted that all Government institutions now follow government directions aimed at improving bottlenecks and avoiding lengthy procedures. The process of Business Process Re-engineering had provided significant improvements, though the Government felt more could still be done. One-stop-shop services are now provided in many Government institutions, and the Government would continue to work hard to ensure service delivery mechanisms would be encouraged in all areas.

Participants were told that banks would now be providing loans equivalent to 70% of a given project if it met the bank’s feasibility assessments. Government officials pointed out that while they could encourage banks to set reduced interest-rates for loans to the Diaspora or offer tax-relief to Diaspora investments, they couldn’t force banks to give loans to projects that failed feasibility assessments. The issue of holding savings over 200,000 birr was related to the threat of possible money laundering which was an international problem. A mechanism of opening up the banking, insurance and telecom sectors to the Diaspora was under study.  An official in the Diaspora Affairs Directorate General in the Ministry of Foreign Affairs had been assigned to deal with Diaspora problems and provide support where necessary. Detailed explanations were given about the new Land Lease Proclamation which had been implemented to put an end to  illegal manipulation of land and make land available at a reasonable price for investment projects that could create job opportunities for the unemployed. Land is public property and the proclamation hasn’t changed this principle. The proclamation doesn’t contravene property rights. It rather creates the opportunity for the Government to use land revenue to fund pro-poor projects such as the building of condominiums or the new 40-60 housing scheme. Under the new housing plan, priority will be given to members of the Diaspora who have the capacity to pay the full cost of a house. Duty-free privileges had been heavily abused, and they would not be restored.

Source:http://www.mfa.gov.et/Press_Section/Week_Horn_Africa_April_27_2012.htm#4