Ethiopia To Establish Telecom Competition Regulator

The Council of Ministers of Ethiopia held extraordinary meeting to approve the draft law for the establishment of telecom regulatory authority.


The establishment of the authority came following Ethiopian government’s decision to liberalize the telecom sector of the country, according to the statement of the Office of the Prime Minister.

The new telecommunication regulator authority Ethiopia is set to establish will be in charge of regulating completion among the different telecom operators.“The bill drafted by the Ministry of finance and approved by the Council of minister is sent to the Parliament for approval,” the statement said, which also mentioned the significance of the regulatory authority in restructuring the telecom market of the country.

Currently, Ethiopia has only state monopoly telecom operator, which has been in the market for over 130 years under different names.

Establishment of new regulatory authority is expected to speed the liberalization and licensing of new entrants into the lucrative telecom market of the east African country, with the population of over 100 million people.

To facilitate partial privatization of mega states enterprise such as Ethiopian Airlines, Ethio Telecom, Ethiopian shipping lines and Ethiopian electric power, the government has recently established 21 members advisory council.

Member of the Advisory Council involves individuals from different walks of life and experiences from politicians to business figures and media practitioners.

Members of the Council include, Dr. Yinager Dessie, the new governor of the central bank of the country – National Bank of Ethiopia and Eyesuswork Zafu Zafu, renowned businessman involved in insurance and banking business.

It also involves politicians from from opposition like, Lencho Batti of Oromo Liberation front, Prof. Beyene Petros and Mr. Lidetu Ayallew.

The team also involves Zelalem Melese, Dr. Alemayehu Seyoum, Maaza Biru, Bekelle Gulleta, Abebe Aemirosellasie, Bekele Gerba, Sara Aberra, Dr. Aynalem Megersa, Prof. Tasew Woldehana, Dr. Tsegaye Berehe, Dr. Tegegnework Gettu, Kassi Kebede, Girma Seifu, Dr. Abrham Tekeste, Teklewold Atinafu and Ambassador Girma Birru.

Source: https://newbusinessethiopia.com/ethiopia-to-establish-telecom-competition-regulator/

Ethiopia, Djibouti sign gas pipeline deal

Ethiopia and Djibouti have signed a deal to build a pipeline to transport Ethiopian gas to an export terminal in the Red Sea state, officials said.

Ethiopia found extensive gas deposits in its eastern Ogaden Basin in the 1970s. China’s POLY-GCL Petroleum Investments has been developing the Calub and Hilala fields there since signing a production sharing deal with Ethiopia in 2013.

The agreement between Djibouti and Ethiopia comes more than a year after POLY-GCL signed a memorandum of understanding with Djibouti to invest $4 billion to build the natural gas pipeline, a liquefaction plant and an export terminal to be located in Damerjog, near the country’s border with Somalia.

It was envisaged that production would start last year, but the Ethiopian government said that was now likely to happen in 2020.

Djibouti’s Energy Minister Yonis Ali Guedi told Reuters late on Saturday the deal hammered out “key terms that will serve as a basis” for related concession contracts.

“It is the most expensive project ever built in the Horn of Africa region,” he said. “The two parties have reached an agreement in principle to allow them to benefit from the project in an equitable manner.”

POLY-GCL is a joint venture between state-owned China POLY Group Corporation and privately owned Hong Kong-based Golden Concord Group.

Africa’s eastern seaboard could soon become a major global producer of liquefied natural gas, with other planned projects based on big gas finds made in Tanzania and Mozambique. 

Source: https://www.reuters.com/article/ethiopia-djibouti-gas/ethiopia-and-djibouti-sign-deal-to-build-gas-pipeline-idUSL5N20C074

Ethiopian coffee farmers are betting on blockchain to make trade fairer and boost business February 19, 2019

On a bustling street near the shiny new international airport in Ethiopia’s capital is a small coffee roaster with big dreams.

 

Nearly 40 Ethiopians — a third of them women — sift, roast and package prized Arabica beans for export to Europe under the Moyee brand, founded by a Dutch social entrepreneur.

 

The roastery, together with the innovative use of blockchain technology to ensure the supply chain is transparent, represents an attempt to keep as much of the profits as possible in Ethiopia, one of the world’s poorest countries.

 

“It’s the world’s favorite drink. We drink over 2 billion cups a day,” said Killian Stokes, who set up the Irish branch of Moyee.

 

“The industry’s worth $100 billion and yet 90 percent of coffee farmers in Ethiopia live on less than $2 a day.” That is partly because most exporters process the beans elsewhere, but price fluctuations and other factors also make coffee-growing a precarious business.

 

To make things fairer, Moyee has created unique digital identities for the 350 farmers it currently works with — meaning buyers can see exactly how much each individual grower is paid, with prices set at 20 percent above the market rate.

 

Now the brand, whose slogan is “radically good coffee,” wants to use blockchain to take that to the next level — allowing buyers to tip farmers, or fund projects such as a new planting program, through a mobile app.

 

The U.N. Food and Agriculture Organization (FAO) said in a recent report that blockchain had huge potential to address challenges smallholder farmers faced by “reducing uncertainty and enabling trust among market players.”

 

The technology, used to underpin cyber-currencies like bitcoin, allows shared access to data that is maintained by a network of computers and can quickly trace the hundreds of parties involved in the production and distribution of food. Once entered, any information cannot be altered or tampered with.

 

Siobhan Kelly, an advisor to the Food Systems Program at the FAO, said blockchain would ultimately be “much bigger than the internet.” “Within 10 years — it’ll take probably 10 years — it’s going to be a major revolution, for everything,” said Kelly.

 

Fruit farmers in Caribbean nations are also looking at using blockchain to attract better-paying customers, bring traceability and build a credit trail. “It’s an innovation that is poised to empower local farmers in the Caribbean region,” said Pamela Thomas, executive director of the Agriculture Alliance of the Caribbean (AACARI), a regional network of nearly 100,000 farmers. AACARI’s project has two components: auditing by accredited professionals to ensure farmers adhere to the Global GAP (good agricultural practices) standards, and a digital marketplace where buyers can find detailed information about the produce. Global GAP is a voluntary standard required by many European and U.S. supermarket chains. Vijay Kandy, whose company is building the blockchain platform, said the auditing process would allow farmers to deal directly with buyers — bypassing the middlemen that many currently rely on — and make access to credit easier. “One reason why buyers from faraway places or different countries go through middlemen is because they rely on them to make sure farmers are following these good practices,” he said. One such buyer is London-based Union Hand-Roasted Coffee.

 

The company sources its coffee directly from growers’ cooperatives to ensure higher quality, pays farmers more than minimum price set by the global Fairtrade organization, and works with more than 40 producer groups in 14 countries.

 

“We currently undertake direct interviews to verify farmers have been paid, but it’s very time- and labor-intensive to do that and to record all that data,” said Steven Macatonia, who co-founded Union in 2001.

 

“So to have a much more simple system where we can get a confirmation that payment has been received and how much that is, that could be hugely beneficial,” he said.

 

Price fluctuations and the impact of climate change make coffee a particularly challenging crop to grow.

 

“Large companies’ profits usually increase when prices are low, but the profit for farmers does not, and in some cases it may cost them money to produce coffee,” said Aaron Davis, head of coffee research at Britain’s Royal Botanic Gardens at Kew. Davis’s latest research shows climate change and deforestation are putting more than half of the world’s wild coffee species at risk of extinction. Ethiopia — the birthplace of Arabica, the world’s most popular coffee — is of particular concern. Up to 60 percent of the land used to grow coffee could become unsuitable by the end of the century, Davis found. “The more a farmer is paid, the more resources he will be able to devote to climate resilience,” he said.

 

Both Davis and the FAO’s Kelly however cautioned that blockchain technology was not going to be a “quick fix,” with farmers around the world facing multiple challenges. “Farmers need access to affordable seeds, to affordable finance and credit when they need it … and these things are not going to be given by blockchain,” said Kelly.

Source: https://www.japantimes.co.jp/news/2019/02/19/business/ethiopian-coffee-farmers-betting-blockchain-make-trade-fairer-boost-business/#.XH1MD4gzbIU


African Development Bank starts electricity cooperative feasibility studies in Nigeria and Ethiopia

The African Development Bank has kicked off a feasibility study to explore the potential of electricity cooperative business models in Nigeria and Ethiopia. The effort is part of the Bank’s goal of achieving universal electricity access across Africa by 2025. Currently, power shortages diminish the region’s GDP growth by 2-4% per year, holding back job creation and poverty reduction efforts.

The study, funded by the South-South Cooperation Trust Fund, will be conducted by the National Rural Electric Cooperative Association (NRECA) International over three months. NRECA will consider regulatory, legal, technical and socio-economic factors that impact the creation of electric cooperatives in the two nations.

Electricity cooperatives are tax-exempt businesses set up and owned by the consumers who benefit from the services provided in generation, transmission and/or distribution. They are used in many parts of the world to provide last mile connections to rural areas through grid extensions and cooperative enterprises. Where successful, they also improve rural electrification, while creating sustainable businesses.

Speaking at the kick-off meeting, Batchi Baldeh, the Bank’s Director of Power Systems Development, thanked the South-South Cooperation Trust Fund for financing the initiative. “This study is timely and aligned with the Bank’s New Deal for Energy in Africa. We look forward to working with NRECA International to execute the study, and to leverage its extensive experience in electricity cooperative business models to pave the way for the implementation of transformational projects across Africa” he said.

Underscoring the importance of Government cooperation and commitment, he added that the cooperatives rely on strong partnerships among governments, rural/local communities and development partners for implementation and success.  “We selected Nigeria and Ethiopia following dialogue with their respective ministers of energy during the Bank’s Africa Energy Market Place held in July 2018, where they expressed their governments’ commitment to improve rural access through established models. We rely on this cooperation to explore this innovative model of delivering our High 5 to light up and power Africa”, said Baldeh

Findings of the study will be delivered in May this year. They will inform the viability of plans to pilot the model in the selected countries.

Source: https://www.afdb.org/en/news-and-events/african-development-bank-starts-electricity-cooperative-feasibility-studies-in-nigeria-and-ethiopia-19023/

Ethiopia To Allow Diaspora Invest In Banking, Insurance

The National Bank of Ethiopia (NBE), the agency in charge of regulating the financial sector of the country, is set to introduce a regulation that will allow Ethiopians in the diaspora to invest in the financial sector.

If the sector is open for Ethiopians in the diaspora, NBE believes that it will reduce the growing engagement of the Ethiopians in the diaspora in the informal money transfer (Hawala) and will boost the remittance income of Ethiopia.

The financial sector of Ethiopia has been closed for Ethiopians living abroad holding a foreign country passport. The financial sector of Ethiopia is also closed to other nationals. For long Ethiopians in the diaspora have been demanding the government to invest in banking, insurance and micro finance.

The decision of the NBE to allow the Ethiopians in the diaspora is expected to boost the performance of the financial sector of Ethiopia. The move is also expected to improve the current liquidity problem and foreign currency shortage in Ethiopia.

Most of all it is also expected to serve as a trial for the inescapable liberalization of the financial sector of the 100 million plus east African country. Investors from across the globe have been expecting Ethiopia for long time to open its financial sector for them.

Some researchers have also been advising the country to speed its accession to the World Trade Organization (WTO), which took over a decade now, by liberalizing its financial sector.

Banking in Ethiopia 


According to December 2018 report of NBE, as of December 2017 the number of banks remained at 18 of which 16 were private and 2 public. These banks opened 164 new bank branches during the review quarter, raising the total number of bank branches to 4,625 of which about 34.4% were found in Addis Ababa.

The report stated that population to bank branch ratio stood at 20,865.56. Of the total bank branches, the share of public banks was 31.8 percent while private banks accounted for 68.2%

“Meanwhile, total capital of the banking system reached Birr 82.0 billion, of which public banks accounted for 63.5% and private banks 36.5%. The share of Commercial Bank of Ethiopia, the biggest state owned bank, in total capital of the banking system, was 54.1%,” the report says.

Insurance in Ethiopia


In Ethiopia there are 17 insurance companies, of which 16 were private. Their branches increased to 518 from 465 a year ago and their total capital reached Birr 4.7 billion, of which 74.6 percent was that of private insurers. Of the total branches, about 53.9 percent were located in Addis Ababa.

 

Micro-finance in Ethiopia


In Ethiopia there were 36 micro-finance institutions (MFIs) which mobilized Birr 28.4 billion in saving deposit and having outstanding credit to the tune of Birr 37.03 billion.

 

Their deposits saw 40.2% annual increase while their credit expanded 38.5 percent. Their total asset also grew by 43.7 percent to reach Birr 56.3 billion at the end of December, 2017. The MFIs had a total of 1,755 branches and sub branches, according to Second Quarter NBE bulletin 2017/18.

Source: https://newbusinessethiopia.com/ethiopia-to-allow-diaspora-invest-in-banking-insurance/

 

Hyundai Ethiopia assembly plant inaugurated

Hyundai Motor Company inaugurated its first assembly plant in Addis Ababa. The car assembly is said to be the first plant in East Africa.

The plant is constructed in Nifas Silk district, Tulu Dimtu locality, and nearly half a billion Ethiopian birr is spent on it, according to a report by FBC.

The executive Director of the Company, Won Hee Lee, arrived in Ethiopia earlier to attend the inaugural ceremony and was greeted up on arrival at Bole International by Birtukan Ayano, State Minister of Foreign Affairs, according to a report by state media – ENA.

Hyundai Ethiopian Assembly plant is a joint venture with Marathon Motor Engineering whose owner is Ethiopia’s legendary long distance runner – Haile Gebreselassie. His company has been importing Hyundai vehicles since 2009.

The plant inaugurated is said to have the capacity to assemble about 5000 Hyundai cars per year and will assemble eight types of models. Also, it is expected to initially create employment opportunity for about 200 people and will grow to 1000 when the plant operates in full capacity, reported Ethiopian Broadcasting Corporation (EBC)

Last month, German automaker, Volkswagen, signed a memorandum of understanding with Ethiopia’s Investment Commission to open a plant in Ethiopia, which is said to be its first in Sub-Sahara Africa.

Source: https://borkena.com/2019/02/21/hyundai-ethiopia-assembly-plant-inaugurated/

 

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