* In this digest, a summary of outstanding developments of economic interest since late August is presented. This compilation of news includes items on infrastructure development, Investments, loan and aid agreements, and current posture of the economy/trends.
Highlights
* World Bank launches a $4 billion strategy in Ethiopia
* World Bank report: Ethiopia inflation is significantly down, competitiveness up. Attests double digit growth.
* Steel factory and sugary factories to invest $500 million, 600 million, respectively
* Two China car builders to expand car manufacturing in Ethiopia
* Ethio Telecom builds new services
* Railway and Road projects
* New large airport to be built
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Ethiopian Government Establishes Oil Company(Sept 13, 2012 )
*Will mine oil and gas
*will partner with private sector
*Named: Petroleum Development Enterprise.
Read more at Bloomberg.
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Ethiopian Airlines Aims to increase Revenue ‘File-Fold’(Sep 07, 2012)
*will buy 14 new aircrafts
*Aims $10 billion sales per year, 120 planes by 2025
*Profit will be ‘reinvested’ in new fleet and infrastructure.
Read more at Bloomberg.
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Ethiopia’s Sugar Corporation and China’s CDC bank agree on a $500 million deal(Sep 26, 2012)
*Will be used to build two factories
*Bank extends $120 million in advance
*Sugar Co. plans to build a total of 11 new factories
*Required amount $5.5 billion
*40% will be covered from sugar sales.
Read more at Bloomberg.
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RC aims to complete 42% of Addis light rail project this year(Sep 29, 2012)
*34.25 km double track, electrified
*Fences 13 meters wide
*‘Mobilization’ works complete
*Ground works underway
*Will have 41 rails, can carry 286 passengers each
*15,000 people/hour/one direction, 60,000/hour in all directions.
Read more at Waltainfo.
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Saudi billionaire and Italian Company agree to build a $600 million steel plant(Oct. 5, 2012)
*Place: Gelisa, near Kombolcha
*Will take three years to build
*Input material to be imported from Europe and US
*Will have impact on the ongoing economic growth and infrastructure development.
Email Source: William Davison(Bloomberg correspondent)
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ERA to announce bids for five major road projects( Oct 06,2012 )
*$415 million dollar investment
*A total of 433km
*International Construction companies are invited
*Roads will stimulate: industrial, agricultural and tourism developments.
*A slew of other road projects are planned and underway.
Read more at The Reporter.
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ZTE, Huawei to be Awarded Ethiopian Telecommunications Contracts (Oct 11, 012)
*Is a two-year contract
*Debretsion:’We are not investing; we are inviting companies to come with their finance’
*Anticipated mobile subscribers, currently at 18 million, is 40 million by mid-2015.
Read more at Bloomberg.
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Ethiopia signs 18.02 billion birr loan agreement with World Bank (Oct 18, 2012)
*10.5 billion birr for potable water, education, health care project in low-income areas
*7.39 billion birr for road projects under construction
Read more at Ministry of Foreign Affairs.
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Ethiopia signs 456m Birr grant, loan agreements with China (Oct 30, 2012)
*256 million birr grant
*200 million birr interest-free
*China representative: support for the realization of Ethiopia’s GTP will continue .
Read more at Ministry of Foreign Affairs.
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PM gives nod to new airport project(Nov 3, 2012)
*PM Hailemariam gave a ‘green light’
*‘Giant’ international airport around Modjo, around 60 km North East of Addis.
*Will seek finance from EXIM bank of China, after parliament endorsement.
Read more at The Reporter.
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DEG of Germany Invests $10 Million in Ethiopian Growth Fund(Nov 09, 2012)
*Schulze Global Ethiopia Growth and Transformation Fund I, created this year
*Targets small and medium enterprises
*For agro-processing and manufacturing
*Plans to invest $100 million more in the future
Read more at Bloomberg.
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ERA to construct ten roads to new sugar factories(Nov 10, 2012)
*Total 574 km: 519 km asphalt, 55 gravel roads
*48% local bidding companies expected
*Sugar will satisfy local market, and will have 2.5% global market share
*Design of sugar factories complete, construction undergoing.
Read more at The Reporter.
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Ethiopian looks to regional hubs in southern Africa((Nov 10, 2012)
*On going talks with Tanzania, DRC, and Zambia
*The airline’s ‘Vision 2025′ strategic plan includes establishing additional regional hubs in central, southern and west africa.
The airline won Diamond Prize for Excellence , on Dec 2, 2012. Its CEO also won awards, CEO of the year and African Business Leader of the Year, on Nov 24 and Dec 22, 2012, respectively.
Read more at The reporter.
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Mesfin Engineering to build for China’s Geely Cars (Nov 13, 2012)
*Mesfin Engineering builds six cars/day Geely Car
*Full production within 3-5 years
Read more at Bloomberg.
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China to Put $1.4b in Railway Pouch(Dec 02,2012)
*Will finance the National Railway Project, 2000 km
*Planned to be complete by 2015
*Two phases: A total of 5000km
Note: The historic Addis-Djibouti railway had a glorious past. It was, in fact, a subject of pop music and humor for being the only one and at the same time tardy before it became dysfunctional out of old age.
Read more at Addis Fortune and Ethiopian Railway Corporation.
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SouthWest Energy of Ethiopia to Raise $100 Million in Equity(Dec 05, 2012)
*Will raise $100 million to finance drilling projects
*Chairman Tewodros Ashenafi: Ethiopia the next oil producing country in East Africa.
Read more at Bloomberg.
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Ethiopia’s Sesame-seeds sales surge (Dec 06, 2012)
*$900 million sales from spices, oil seeds, and spices
*Government provides ‘incentives’ for companies
*Sales estimated $2 billion by 2015
Foreign currency obtained from sales is a collateral for loans secured from Chinese bank to be deposited at Commercial Bank of Ethiopia.
Read more at Bloomberg.
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Mercy Corps, private aid agency Plans $10 Million Private-Equity Fund (Dec 11, 2012)
*Portland-based agency hopes fund will encourage foreign investment
*US and British companies have shown interest
*Country Director Graham: Private equity better than debt finance for rapid growth
Email source: William Davison (Bloomberg correspondent)
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World Bank Ethiopia Economic Update:Overcoming Inflation, Raising Competitiveness(Dec 13, 2012)
*‘impressive growth’
*World Bank calls Ethiopia’s growth impressive at an average of 10.6% GDP/year 2004- and 2011.
*Twice as much as average of Sub-Saharan countries.
*‘Overcoming Inflation, Raising competitiveness’
*Government of Ethiopia ‘made a progress in tackling persistent high inflation’
*Inflation is in decreasing trend.
*Lars Christian Moller, Lead Economist and Sector Leader for Ethiopia:
Ethiopia’s comparative advantage lies ‘in export of primary products and labor intensive, low-skill manufacturing goods.’
Read the full update report at World Bank.
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Ethiopia to get LTE(Dec 17, 2012)
Arguably, the most exciting news in the ICT sector is that Ethio Telecom, the only telecom in the country, has developed:
‘new products and services to offer to enterprise customers such as business mobile, machine to machine business solution and 3G VPN, and upcoming products such as hybrid business mobile, GPRS and prepaid roaming services.’
Read more at telecoms.
This will trigger unprecedented motivation for technology entrepreneurs to develop business and consumer services and solutions boosting technological innovations. Using the backbone network of telecom, small or large enterprises will catapult to an new level of business operations in the country.
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Lifan of China Mulls Africa Expansion After Ethiopian Plant Move (Dec 17, 2012)
*To spend $30 million over five to manufacture cars
*Will move into a new assembly plant at a cost of $3.5 million next year.
*China’s Lifan chose Ethiopia as Africa base because favorable relations of the two countries, low crime rate and political stability in Ethiopia.
*General Manager Liu Jiang: ‘The economy is growing, everything is growing,Of course it has great potential.’
Foreign Direct Investment is rising in Ethiopia, said William Davison of Bloomberg, referring to an email from World Bank. It is expected to increase from 3.1% in 2011 to 20112 4.5% of this fiscal year.
Read more at Bloomberg.
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World Bank launches $4 billion worth plan for Ethiopia(Dec 22, 2012)
*The Bank launched a new strategy with $4bn:
*Implementation years 2013 – 2016.
* Targets to increase ‘competitiveness and job creation’
*World Bank Country Director, Guang Chen: Strategy
‘is a result-based strategy anchored in the Ethiopia’s Growth and Transformation Plan’
GTP vision is Ethiopia to ‘extricate itself from poverty to reach the level of a middle-income economy between 2020 and 2023′
*World Bank: GTP ‘Ambitious but attainable’
*Sufian Ahmed, Minister of Finance and Economic Development, welcomed the move
*Said will support achieve an annual growth rate of 11-15%.
*The previous strategy launch date was April 2, 2008.
Read more at Waltainfo, World Bank PDF Report.
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Please check the archives for more on the issues raised above.
* This digest is part of the “Post-Meles 2012″ Special Edition of this blog.
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