Ethiopia's Economic Outlook in 10 Minutes

Minute 10. The Ethiopian Economy—a historic shift is in the works. Without much notice, agriculture recently ceased to be the largest sector in the economy for the first time in Ethiopia’s history. This heralds a major structural transformation of the economy and we forecast that the services sector—which covers real estate, hotels, transportation, communication, banking, health and education—will make up more than half of Ethiopia’s GDP in just two years time, a development with many implications and opportunities for Ethiopian business.

Minute 9. Economic policies are set to be relaxed. Somewhat equally unnoticed, policy changes

have accelerated recently in a number of economic spheres, and we forecast this trend to gain

further momentum in the next year or two. The positive trends seen of late include a pick-up

of privatization, an openness to introduce modern commodity and capital markets, a passive

acceptance of private share issuance, reforms (albeit marginal) in the telecom sector, a renewed

policy drive to revitalize the industrial sector and, perhaps most meaningful, a rebalancing of the

policy focus within agriculture from peasant-based to commercial farms. There remain of course

many areas where policy reform is still—in our view—far too gradual and far too controlled.

8. At long last, commercial agriculture will truly be taking off. Agriculture as a whole

will continue to show a diminishing role in the economy, but what is currently just a tiny subset of this sector, namely commercial agriculture, is on the verge of a major growth spurt. We project a five-fold increase in land devoted to commercial agricultural farms will occur in the next few years.

Minute 7. Special incentives to businesses will no longer target only exporters. The previous

policy fixation on providing incentives mainly for exporters will, quite appropriately, now switch

to giving similar support to import-substituting industries. This will help multiple sectors, most

notably those in steel and metal processing, cement, glass, chemicals, several fast-moving

consumer goods, and pharmaceuticals.

Minute 6. Though inflation has fallen sharply, near-term monetary policy will remain

unnecessarily tight. Inflation has ceased to be a serious macroeconomic policy issue for

quite some time. While this is welcome, the central bank’s view towards inflation appears to

have taken a sharp turn from a period benign neglect (2007/08) to what now appears to be an

unusually strong anti-inflationary stance. The costs to the private sector of the latter approach

have been unduly high in our view, as businesses were starved of much-needed credit when the

source of Ethiopia’s inflation problem was more closely linked—as we see it—to excessive public sector activity. Some relief is likely, however, in the second half of the 2010.

300 seconds remaining  . We expect private banks to be relieved from credit caps by July 2010, a welcome end to what has been a very blunt means of inflation control. The banking industry,

long accustomed to open-ended credit growth, recently entered an era of tight, bank-by-bank

credit ceilings. However, with the increasing recognition that the current monetary stance is

unduly tight and the need to develop a much more market-based monetary policy framework,

we believe that bank-by-bank credit ceilings will be removed in the second half of 2010. The

recent credit caps are unlikely to hurt the profitability of banks by much this year; in any case, the expected relaxation of the caps should bring a return of the historically high returns on equity to which banks have become accustomed.

Minute 4. Contrary to official projections, we forecast that Ethiopia’s economic growth will

be the slowest in six years. This projection is due mainly to what now increasingly appears

to have been a poor kiremt harvest: agricultural growth is likely to be close to zero in our view.

We reiterate our view—highlighted in last year’s Macroeconomic Handbook—that Ethiopia’s

medium-term growth can comfortably stay in the 6-8 percent range given several positive trend

breaks seen in recent years.

3. A correct exchange rate policy is finally here to stay—businesses should thus expect

the Birr to reach 14 Birr/USD (but not much more) as early as July 2010 and move close to 15 Birr/USD by mid-2011. We think the current exchange rate level is finally close to what it should be, and also believe this is a policy stance that is here to stay. For the coming year, businessesshould expect gradual monthly depreciations—averaging 4 cents per month according to our forecasts—plus a step devaluation of about five percent, which is roughly the gap being

recorded between inflation in Ethiopia and its trading partners.

120 Seconds . Foreign borrowing is ballooning and will increasingly come from private, not

governmental, sources. Loans from sources such as commercial banks and suppliers credits

surpassed loans from governmental sources for the first time last year and we see this as a

trend that is likely to continue. The government and parastatals remain the near-exclusive

beneficiaries of external loans, but we expect this to change gradually, opening up opportunities

for local businesses and banks as well as for foreign providers of external finance.

60 Seconds. A Shift from West to East—the “MICs” will soon become Ethiopia’s biggest

economic partners. While much of the world is fixated with the rising economic power of

the BRICs (Brazil, Russia, India, and China), Ethiopia’s business and economic fortunes are

increasingly being tied with the “MICs” (Middle East, India, and China). According to our

projections, export, import, and foreign direct investment flows between Ethiopia and the “MICs”will in all three cases exceed the comparable figures with the West within just three years.

You are done!!!

Source:Access Capital-March 30, 2010.

Download the complete report

Imperial Hotel to be sold to Access Capital

Access Capital Services is to acquire the property of Imperial Hotel, following a deal owners of the brand made last week with managers of Access, reliable sources disclosed to Fortune.

Managers of Access Capital have been negotiating to acquire the property in order to change Imperial to a resort hotel, with an additional investment of four million dollars, these sources disclosed.  Access Capital plans to reduce the 63 rooms down to 45, in order to meet the requirements of a resort hotel, these sources disclosed.

A team of experts from Lebanon were at the hotel a few months ago, conducting valuations, inspections and assessments, eye witnesses told Fortune.

It was following this inspection that Tsegaye Asfaw, general manager of the hotel, and Ermyas Amelga, general manager of Access Capital, signed a Memorandum of Understanding (MoU)in September 2010; they were scheduled to sign the final deal last week but it was postponed due to Ermyas’s departure to the United States (US).

However, both parties have agreed for the hotel to cease its operations on December 1, 2010, and transfer the property to the buyers on December 31, Tsegaye confirmed to Fortune.

more 

According to a leaked document, the new Ethiopian railroad network will connect about 49 urban centers

The new Ethiopian railroad network will connect about 49 urban centers, according to a leaked document. To date, the government is unwilling to disclose the details of the pan, except for highly generalized statements. Various media outlets, local and international, have reported the government’s unwillingness to disclose.

The document,  which has been issued sometime in September or October and circulated among high ranking government officials, stresses the strategic importance of the railroad network plan for the success of the 5-years Growth and Transformation Plan(GTP). It urges, in the strongest terms, ‘all concerned’ to give unconditional cooperation to the success of the plan. Presumably, this is intended to preclude bureaucratic red tapes, which often result in higher program costs and the discouragement of contractors.

The new railroad network is planned to have at least 8 main routes that extends to all compass points. The   rail line will link no less than 49 urban centers, where railway stations are to be established. The proposed rail line crosses the borders of all regions, except Gambella. The network connects, among others, the Chartered Cities Addis Ababa & Dire Dawa, 7 of the 9 State capitals, and towns bordering Sudan, Kenya and Djibouti.

To this end, the government plans to construct 4,780 Km railroad network.(See the map) The newly established Ethiopian Railway Corporation is responsible for the supervision of the construction.The new railway system is said to enhance the freight transport capacity of the nation by ‘at least five million tones, probably more’. The construction of the railroads is estimated to cost 40-50 Billion Birr spread on 7 years, while creating ‘job opportunity for several hundred thousands of people.’

‘Though the construction of the new railroad system is to be conducted in two phases’, the leaked document notes, ‘it is basically one program which is pivotal to the renaissance of the nation.’ Thus, it urges all concerned to embark on the preparatory works needed for all phases of the construction ‘without any delay.’ The document urges ‘all concerned’ to ensure the success of the plan in a manner that engages and benefits youth and women, and complements the transformation of Cooperatives.’

The reasons why the details are kept quasi-secret are not known. One of the reasons is to avoid undue expectations among the towns indicated in the current railroad design, according to my sources. Since some modifications to the rail routes may be made based on the recommendations of the consultants responsible for drawing the final design. However, this is unlikely to be the sole reason, since the current design is based on a fairly long study and major alterations of the route are highly unlikely, according to professionals in the rail industry.

So far, the nation has a railroad that links Addis Ababa, via Dire Dawa, to the port of Djibouti. The 781 Km long rail tracks were built by French in the early 1900s. About one third of the track is being re-laid with heavier weight rails; that is, changing the original 20kg per meter rails with 40kg per meter rails. A Belgian(?) company is responsible for the maintenance project, which the European Union funds.

Below are the towns that the proposed rail line connects.

TO WESTERN
Endpoint – Kurmuk, Sudan border
Addis Ababa – Sebeta – Ambo – Ijaji – Nekemet – Nejo – Asosa – Kurmuk, Sudan border

TO SOUTH-WESTERN
Endpoint – Bedele
Addis Ababa – Sebeta – Ambo – Ijaji – Seqa – Bedele
Endpoint – Dima
Addis Ababa – Sebeta – Ambo – Ijaji – Seqa – Jimma – Tepi – Dima

TO SOUTHERN
Endpoint – Hawassa
Addis Ababa – Sebeta – Mojo -  Zeway – Shashemene – Hawassa
Endpoint – Weyto
Addis Ababa – Sebeta – Mojo -  Zeway – Shashemene – Sodo – Arbaminch – Konso – Weyto
Endpoint – Moyale, Kenya border
Addis Ababa – Sebeta – Mojo -  Zeway – Shashemene – Sodo – Arbaminch – Konso – Yabelo – Mega -  Moyale, Kenya border
Endpoint – Asela
Addis Ababa – Sebeta – Mojo – Adama – Iteya – Asela
Endpoint – Ginir
Addis Ababa – Sebeta – Mojo – Adama – Iteya – Indeto – Gasera- Ginir

TO NORTHERN
Endpoint – Finoteselam
Addis Ababa – Sebeta – Mojo – Adama – Awash – Combolcha – Dessie – Weldya – Wereta – Bahirdar -  Finoteselam
Endpoint – Shire
Addis Ababa – Sebeta – Mojo – Adama – Awash – Combolcha – Dessie – Woldya – Mekele – Aksum – Shire

TO NORTH-WESTERN
Endpoint – Metema,  Sudan border
Addis Ababa – Sebeta – Mojo – Adama – Awash – Combolcha – Dessie – Weldya – Wereta – Azezo – Gendaweha – Metema, Sudan border

TO NORTH-EASTERN
Endpoint – Galafi, Djibouti border
Addis Ababa – Sebeta – Mojo – Adama – Awash – Combolcha – Dessie – Woldeya – Semera – Ditchto – Galafi, Djibouti border

TO EASTERN
Endpoint – Dewele, Djibouti border
Addis Ababa – Sebeta – Mojo – Adama – Awash – Dire Dawa – Mieso – Dewele, Djibouti border

Stay tuned for more updates on this matter in the coming weeks.
Source: Several blogs are reporting about this news.

Ethiopia’s government is aiming to license 50 mineral-exploration projects every year

Ethiopia and Eritrea Geological map 

Ethiopia’s government is aiming to license 50 mineral-exploration projects every year and more than double exports from the industry to $1 billion in five years, said an official at the Mines Ministry.

Investment in the mining industry has surged from less than $100 million in 2003 to an accumulated $1.3 billion, said Gebre Egziabher Mekonen, head of the mineral operations department at the ministry.

“The sector has seen a dramatic change,” he said in an interview in the capital, Addis Ababa, yesterday. “Seven years ago, the West didn’t know about our mineral resources.”

The Horn of Africa nation, which has deposits of gold, silver, copper, platinum, potash and tantalum, exported $281 million of gold in the fiscal year to July 7, according to Gebre. Ethiopian-born Saudi billionaire Sheikh Mohammed al- Amoudi’s Midroc Gold Mine and Perth, Australia-based Nyota Minerals Ltd. both plan large-scale operations in the country, he said.

There are currently 80 international and local firms operating 160 projects, Gebre said.

The industry is “totally open” to foreign investors, Gebre said. “There is no restriction to any investment.”

Mining exports earn Ethiopia about $400 million annually, Gebre said, making it the second-largest foreign-exchange earner after agricultural produce. It is hoped this figure will rise to about $1 billion after five years, Gebre said.

To contact the reporter on this story: William Davison in Addis Ababa via Johannesburg at pmrichardson@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.

Indian Billionaire sells more than half a billion roses a year in a leased land larger than the state of Rhode Island in Ethiopia

Sai Ramakrishna Karuturi

By Mehul Srivastava and Subramaniam Sharma

SPECIAL REPORT

Indian billionaire Ravi Ruia has flown to Africa at least once a month for the past year and a half. He's invested in coal mines in Mozambique, an oil refinery in Kenya, and a call center in South Africa. Soon, he may also have a power plant in Nigeria. "Africa looks remarkably similar to what India was 15 years ago," says Firdhose Coovadia, director of African operations at Essar Group, the $15 billion conglomerate headed by Ruia and his brother, Shashi. "We can't lose this opportunity."

Faced with increasing competition and a welter of bureaucratic obstacles at home, Indian companies are looking to Africa for growth. Since 2005 they have spent some $16 billion on the continent, vs. at least $31 billion for the Chinese, according to data compiled by Bloomberg and the Heritage Foundation, respectively. Bharti Airtel, India's largest mobile-phone provider, in June paid $9 billion for the African cellular operations of Kuwait's Zain. In 2008, India's Videocon Industries paid $330 million for two coal mines in Mozambique, and India's state-run fertilizer maker bought an idled Senegalase phosphorus producer for $721 million.

Beyond those big deals are dozens of smaller acquisitions and investments by Indian companies. "Compared to India, valuations [in Africa] are quite attractive," says Anuj Chande, who heads the South Asia Group at accounting firm Grant Thornton in London. "We're expecting to see a lot of midsize deals across a variety of sectors."

The Indians view Africa as a place where they can replicate the low-cost, high-efficiency business model they have honed at home. Like India, Africa has hundreds of millions of underserved consumers eager to buy products tailored to their needs. Consumer spending in Africa may double, to as much as $1.8 trillion, by 2020, McKinsey & Co. predicts, an increase that would be the equivalent of adding a consumer market the size of Brazil. As a pioneer in sales of single-use sachets of soap and shampoo (along with Unilever (UL) and Procter & Gamble) for lower-income Indians, Mumbai-based Godrej Consumer Products understands "low-cost, value-for-money products," Chairman Adi Godrej said in a May interview. In June his company acquired Nigerian cosmetics maker Tura, and in 2008 it bought South African hair-care company Kinky. "We want growth. Whether it's from inside or outside India, we are agnostic," Godrej said.

Indian companies also see Africa as a hedge against a possible slowdown at home. "If tomorrow the Indian economy was to take a U-turn, then at least you have other markets which are growing," says Neeraj Kanwar, managing director of Apollo Tyres, India's No.    2 tiremaker. His company bought South Africa's Dunlop Tyres for $62 million in 2006, giving Apollo two manufacturing plants on the continent and brand rights in 32 African countries. Apollo aims to triple sales, to $6 billion, by 2015, with 60 percent of revenue from abroad, vs. 38 percent today. "Africa is going to give me growth," says Kanwar.

Essar has endured endless squabbles with Indian landowners who refuse to make way for steel mills. Like other Indian companies tired of regulatory headaches at home, it moved into Africa and now has 2,000 employees there. Bangalore-based Karuturi Global, the world's largest rose producer, couldn't get enough land in India to compete with European and African rivals. Many times flowers wilted on the tarmac as cargo flights were delayed or canceled, including a big Valentine's Day shipment. So in 2004, Karuturi bought a small plot in Ethiopia, and sales have since grown elevenfold, to $113 million in the year ended Mar. 31. Karuturi now leases 1,200 square miles of land—larger than the state of Rhode Island—in Ethiopia and sells more than half a billion roses a year. "Africa offered us a scale we could never reach in India," says Managing Director Sai Ramakrishna Karuturi. "I'd love to do more in India, but getting even 1,000 acres near Bangalore took years."

The bottom line: Indian companies, faced with increasing competition and bureaucratic obstacles at home, are looking to Africa for growth.

Srivastava reports for BusinessWeek from New Delhi. Sharma is a reporter for Bloomberg News.

Ethiopians Investors are seizing untapped opportunities in Juba (Southern Sudan)

• Getahun has more than USD 350,000 worth of an investment in Juba and he makes around USD 20,000 per month.  

By Zekarias Sintayehu(The Ethiopian Reporter)

The signing of the Comprehensive Peace Agreement (CPA) between the north and south in 2005 is one of the factors that paved the way for business opportunities in South Sudan.

After nearly half a century of on-and-off civil war between the two sides, the southerners are expected to vote next year on whether their semi-autonomous region should become a fully independent nation or not. Time is flying and the birth of a new state, the state of South Sudan, is nearer than ever.

Since the signing of the CPA, the government of Southern Sudan has been encouraging everyone to invest in South Sudan and exploit the opportunities it has in stored there. The main focus has been and still remains to be the commercial and business sector. As a result, a number of multinational, regional and local companies have encamped across South Sudan, contributing to the reconstruction of the region and provision of employment opportunities.

South Sudan is just five months away from a self-determination referendum that will most likely seal the separation from the North. Ethiopia is one of the neighboring countries that are strategic to the South Sudan. Ethiopia shares a border area of 1200 km with the about to be new state. Ethiopia’s Gambella region shares its borders with the Eastern Equatoria, Jonglei and Upper Nile states of South Sudan. As a result, the economic relationship there has been expanding considerably over the years.

After the referendum, Juba will assume the role of capital city. There are around 2000 Ethiopians living in South Sudan. Though most of them are employees and daily laborers, some own businesses too. Getahun Shibru, owner of the first Ethiopian restaurant in Juba, migrated to Kenya in 2006 in search of a better life. Before he left the country, he was working in SOS Ethiopia, a local orphanage earning 2,500 birr.

Life in Kenya was tough for him. After he spent four months in Nairobi, he planned to move to Uganda. But before he cross the Kenyan border he spent three weeks with a Kenyan businesswoman in the border town of Malwal where he learnt the big employment opportunity in South Sudan. However, he proceeded to Kampala again to come across some Sudanese people and obtain a profound knowledge about the country. Finally, he decided to travel to South Sudan and tried his luck in Juba. He found out that he can make a good profit from egg, salt, bottled water, milk and onions. Then Getahun decided to buy the listed goods from Kampala and made his way to South Sudan. 

“I don’t know anyone in South Sudan but I started my journey anyway, putting my trust in God,” says Getahun. Passing through the border was very difficult, especially if you don’t have a passport, he added. He reached Yeyi, a border town of South Sudan, at midnight.

He said, “I had no idea where to go at that time.” But he started following the other folks since he realized they were looking for a place to stay. “I was starving to death since I had nothing to eat.” Finally, I found a place to pass the night, he added. “I slept on the ground inside a tent and amazingly it cost me around USD 8,” Getahun said. The next morning, Getahun faced another challenge; the bus which carried his merchandize didn’t show up. On the fifth day he was able to find the bus and went on to Juba.

In Juba he stayed in an Eritrean home for a while as there was nobody he knew. In the meantime, he sold all the goods that he brought from Kampala and made a good profit.

Later he returned to Yeyi and started to work with the Habesha restaurant owner. Then he managed to get land in Juba to open a restaurant. “Kush” was the first Ethiopian restaurant in Juba established in 2007.

Then he moved to Kampala bringing one employee from there to run the restaurant. “I perform most of the activities at the restaurant including serving the customers by myself. I borrowed some properties from Eritreans to augment the restaurant’s capacity," Getahun said. Kush started to grow faster than expected and became a famous restaurant.

Getahun told The Reporter that he managed to partner with a Sudanese businessman and opened a motel called “Tourist Motel,” which had 17 bedrooms. Currently, Getahun is building another lodge which has 15 bedrooms, each priced at USD 40 per night.

If the referendum resulted in separation, there will be a big business opportunity in South Sudan, according to Getahun. This is because there will be an infrastructural improvement when the country gets its independence, he explained. Many investors will start pouring into the country, which will create a business opportunity. 

Getahun said that unlike other neighboring countries, Ethiopia is not exploiting the business opportunity in South Sudan. According to him, the absence of roads connecting Ethiopia to South Sudan is the main reason for that. Eventually, the road could connect South Sudan through Djibouti to the Red Sea which results in creating huge business opportunity to Ethiopia. The roads are vital since they bring foreign currency to Ethiopia. He said that the business potential in South Sudan is untapped.

At the moment, Getahun has 30 employees under him, most of them Ethiopians. Besides, he is planning to open a clinic in Juba. He also has a plan to invest in the agricultural sector in Ethiopia. He has more than USD 350,000 worth of an investment in Juba and he makes around USD 20,000 per month. 

Yosef Gashaw, owner of Yagot PLC, established there three years ago, started business in South Sudan by importing cigarettes and other articles from Ethiopia. His company was an agent for the National Tobacco Enterprise (Ethiopia). In addition, he is also an agent for Anbessa Shoe Factory and imports military shoes from Ethiopia for South Sudan soldiers. more on Ethiopian Reporter

Chinese firm to build the biggest cement plant in Ethiopia

Mining deal China-Ethiopia - The Ethiopian Mines Ministry has signed an agreement with a private Chinese mining firm, C.H. Clinker, which plans to produce 10,000 tonnes of cement daily, state media reported Wednesday. The Ethiopian Mines Minister Sinknesh Ejigu, and C.H Clinker's Managing Direct or Liu Yan Ling, signed the agreement, offering exclusive rights to the firm to exploit some 12.3 million tonnes of limestone for 20 years.

'The licensee has an exclusive right for large-scale mining of limestone within the license area,' the state-run Ethiopian News Agency (ENA) reported.

The Chinese firm has already invested some 500 million birr (US$ 31 million) for its initial mining operations, which would help the rapid economic expansion in the East African nation, currently witnessing a building construction boom.

The Chinese firm has already finalized the construction of its plant, located in north Shoa, in the greater Oromia regional state, some 175 kms outside the capital, Addis Ababa.

Ejigu said the firm would employ 300 people once it reaches its full production capacity.

The Chinese firm plans to produce clinker for both the Ethiopian market and export.

French cement firm, the Lafarge group, is also reportedly building plant in the north Shoa region, to exploit what is believed to be a large deposit of limestone.

Ejigu said Ethiopia had licensed some 85 firms to explore and exploit minerals.

The minister said the government policy of luring foreign mining firms was paying off, mainly because of the government's sound mining and investment policies.

The Chinese firm, which is registered locally, hopes to invest 6 billion Birr (US$ 375 million) in its entire mining operation.

Addis Ababa - Pana 11/11/2010

Source: Afriquejet.com

Elegant Twin Towers in Addis Inaugurated

Leikun Berhanu, president of Awash International Bank (AIB), and Tsegaye Kemssie, president of Awash Insurance Corporations (AIC), stand in front of the twin towers dubbed “Awash Towers”, the future headquarters for both, during the towers’ inauguration on Saturday, November 6, 2010. More on Addis Fortune

Ethiopian commodity Exchange hopes to become the Global reference for Sesame Seed trade.

Sesame seeds were traded on the Ethiopian Commodities Exchange (ECX) for the first time on Friday, November 5, 2010, Where officials at ECX where hoping would become the price reference for the international market.

The New York international market is the reference for Arabica coffee and the Chicago market for maize, but there is no global reference for sesame.

“With the start of sesame trading on the ECX, our target is to include sesame from Ethiopia as the global market reference,” Eleni Gabre Madhin (PhD), chief executive officer (CEO) of the ECX, during the first trading.

Although sesame has a significant share in the total items exported from Ethiopia, its export used to be handled by individual exporters or unions. The process to include sesame among the commodities like coffee and maize which are traded by the ECX started in 2006 but the lack of warehouses and quality assurance delayed it.

After Mussie Yacob, (PhD), chairman of the board of directors of Ethiopian Pulse, Oilseeds, and Spice Processor Exporters Association (EPOSPEA), rang the bell to open trading, two types of sesame were traded. More on Addis Fortutne

Allana Potash Corp acquired a 100 % interest in a strategically located concession in Danakhil Depression

Potash (specially potassium carbonate) has been used from the dawn of history in bleaching textiles, making glass, and, from about A.D. 500, in making soap. Potash was principally obtained by leaching of the ashes of land and sea plants. Beginning in the 14th century potash was mined in Ethiopia. One of the world's largest deposits, a deposit of 140 to 150 million tons, is located in the Tigray's Dallol area.^[5]   (Wikepedia)

TORONTO, ONTARIO--(Marketwire - Nov. 9, 2010) - Allana Potash Corp. (TSX VENTURE:AAA) ("Allana" or the "Company"), is pleased to announce that the Company has entered into an agreement to acquire a 100 % interest in a strategically located concession at its Ethiopian Potash Project in the Danakhil Depression, Allana has entered into this agreement with Haro Exploration Corporation, a private company operating in Ethiopia.

To view "Fig. 1 Location of the Haro Concession, Ethiopia," please visit the following link:

media3.marketwire.com/docs/allana_potash_fig1_nov9.pdf

Farhad Abasov, President and CEO of Allana Potash, stated: "We are very excited to have completed the acquisition of the strategic Haro concession adjacent to the Musley Potash Deposit. Management believes this concession gives Allana the opportunity to expand its potash resource in an area located between its two potash deposits. Allana plans to mobilize road building equipment and one drill rig in order to evaluate the extension of the potash horizons onto the Haro concession. The acquisition of the Haro concession complements our ongoing exploration efforts and confirms our commitment to developing the potash resources in the district through both exploration and consolidation."

The Haro concession is approximately 11 km2 and is surrounded by the Allana concessions (see Fig. 1). The Haro concession has no historic drill holes but occupies a strategic location between the historic Musley Deposit and the Crescent Carnallite deposit. In addition, the concession is approximately 1 km from Allana drill holes DK-10-02 and DK-10-03 which returned 5.5 metres of 25.8 % KCl and 9.95 metres of 19.5 % KCl respectively (see Press Releases June 15, 2010 and July 7 2010). Management believes there is good potential that this mineralization, interpreted to be the extension of the Musley Deposit, extends on to the Haro concession. Allana plans to mobilize one of its drills to the Haro concession to test this potential extension.

Allana can acquire a 100% interest in the Haro concessions by completing CAD $2,000,000 in option payments over 3 years and incurring CAD $2,000,000 in work expenditures over 3 years. The Company will pay a finder's fee to an arm's length party in connection with this acquisition. Closing of the acquisition remains subject to certain conditions, including without limitation, satisfactory confirmation of title, completion of the transfer and conveyance and any required approvals.

Allana is also pleased to provide an update on its exploration activities at its Ethiopian Potash Project. Hole DK-10-06, located in the west-central part of the basin, was completed to a depth of 585 metres and logging and sampling have been completed. Samples are currently en route to Saskatoon and results are expected in 10-14 days. As outlined above, this drill rig has moved north to begin drilling near the newly acquired Haro concession at Hole DK-10-07 which is currently at a depth of 40 metres. Potash is expected to be intercepted at depths similar to hole DK-10-03, 150 metres to 175 metres, which is located approximately 800 m northwest of Hole 07. Drillhole DK-10-05, located in the centre of the basin, is currently at a depth of 677 metres and is expected to continue to a depth of 750 metres to 800 metres.

The seismic work is now underway in the southern part of the evaporite basin. Preliminary interpretations show a number of good reflectors and the survey should be completed in 3-4 weeks.

About Allana Potash Corp.

Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally with its major focus on a previously explored potash property in Ethiopia with Inferred Mineral Resource of over 100 million tonnes of potash mineralization (Sylvite and Kainite) with a composite grade of 20.8 % KCl (see News Release Sept. 17, 2008). Allana has approximately 118.5 million shares outstanding and trades on the TSX-Venture exchange under the symbol "AAA".

Peter J. MacLean, Ph.D., P. Geo., Allana's Senior VP Exploration, is a Qualified Person as defined under National Instrument 43-101 and has reviewed and approved the technical information presented in this release.

Allana Potash Corp. 

Ethiopian Railway Corporation requested bid winners to submit design and survey in five months.

By HAILU TEKLEHAIMANOT
FORTUNE STAFF WRITER

The Ethiopian Railway Corporation (ERC) has given the 18 companies, which have won the bid for the design, survey, and supervision of four railway tracks, five months to deliver the first two.  

Projected to cost around 180 million Br, the design of a total of 1,833.6km of railway was awarded to 18 companies at the end of September 2010. Consultants of Category III and above were approached by ERC months ago to express interest for the projects which comprise a total of 18 lots.

Those which had shown interest were evaluated on its similar experience over the past 10 years, professional staff, annual turnover of the last five years, and available facilities.

After the evaluation many had made bids for the project, the first of its kind in magnitude and scope, in droves. Although around 100 companies attended the opening of the financial proposals in August 2010, only a few were awarded design bids and still fewer consultants won lots.

It was later decided by the government that each company will do only one lot and they were distributed to those who came in second during the initial bids, according to sources who work for one of the consultants which had taken part but wanted to remain anonymous as they were not authorised to comment. more

Ethiopia ranked 1st in Africa and 11th worldwide for improving human development since 1970

Human Development Index (HDI). A composite measure of achievements

in three basic dimensions of human development—a long and healthy life, access to knowledge and a decent standard of living. For ease of comparability the average value of achievements in these three dimensions is put on a scale of 0 to 1, where greater is better, and these indicators are aggregated using geometric means.

The top HDI movers (countries that have made the greatest progress in improving the

HDI) include well known income “growth miracles” such as China, Indonesia and South

Korea. But they include others—such as Nepal, Oman and Tunisia—where progress in the

nonincome dimensions of human development has been equally remarkable (table 1). It is striking that the top 10 list contains several countries not typically described as top performers.

And Ethiopia comes in 11th, with three other Sub-Saharan African countries (Botswana,

Benin and Burkina Faso) in the top 25.

To read the complete  2010 Human Development report click here. To read the summary of the report click here.

Ethiopia to build the largest wind farm in Africa within 30 months

ADDIS ABABA (AFP) — Ethiopia on Thursday signed a 220-million-euro (300 million dollar) deal with a French company for the construction of Africa's largest wind farm.

The contract was inked by representatives of the Ethiopian Electric Power Corporation (EEPC) and French wind turbine manufacturer Vergnet.

The wind farm is expected to produce 120 megawatts within two and half years, making it the largest such project on the continent.

"This is a very strategic project for us. The first (largest) in Africa for wind energy production with 120 megawatts, that is to say 15 percent of our present capacity," EEPC chairman Meheret Debebe said.

"This project will help us to fill the gap of hydrological risks we are facing in Ethiopia with the droughts," he explained.

Ethiopia has been chronically hit by droughts, affecting the humanitarian plight of millions as well as crippling its electricity production, which is heavily reliant on hydroelectric dams.

The landlocked Horn of Africa country -- Africa's second most populous -- is currently experiencing a severe drought and has been plagued by incessant power cuts in recent months.

"This contract is a very important one cause with a budget in excess of 200 million euros it will be the largest wind farm in Africa," French Minister of State for Foreign Trade Anne-Marie Idrac said at the signing ceremony.

"It is also very symbolic of France's commitment to developing renewable energies," she added.

Copyright © 2010 AFP. All rights reserved.

The World Bank-managed fund allotted $51.5 million to Ethiopia

The Global Agriculture and Food Security Program (GAFSP) has awarded a second round of grants worth $97 million to Ethiopia, Mongolia and Niger for projects aimed at fighting hunger and poverty, the U.S. Treasury Department said on Thursday, Agence France-Presse reports.

"The World Bank-managed fund allotted 51.5 million dollars to Ethiopia, 33 million to Niger and 12.5 million to Mongolia. The grants are aimed at helping each country increase food security, raise rural incomes and reduce poverty by enabling small-scale farmers to grow more crops and earn more," the news service writes.

The program, originally funded by the U.S., Canada, South Korea, Spain and the Bill & Melinda Gates Foundation, recently received $50 million from Australia, AFP reports. "The fund was created in response to a call by leaders of the Group of 20" last year, which will meet again next week in Seoul, South Korea (11/4).

"These investments will improve access to better seeds and soil, build rural infrastructure and connect farmers to markets. While three countries have been granted funding, many more compelling proposals were not financed due to lack of resources. In order to sustain this fund, we urge our G20 colleagues to join us in this endeavor," Tim Geithner, the treasury secretary, said in a press release. South Korean Finance Minister Yoon Jeung-hyun and Bill Gates, co-chair of the Gates Foundation, are also quoted in the release.

"The winning countries were selected based on the recommendations of an independent review conducted by global agriculture experts. In addition to having strong needs, the successful proposals demonstrated a comprehensive national agriculture strategy, technically sound interventions to increase agricultural productivity and a commitment to invest their own resources in the agriculture sector," according to the release (11/4).

This information was reprinted from kff.org with permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Global Health Policy Report, search the archives, and sign up for email delivery. © Henry J. Kaiser Family Foundation. All rights reserved.

Ethiopians abroad are sending $3.2 Billion to their families

Ethiopia receive USD 3.2 bln in remittances, says World Bank

By Binyam Tamene       

NBE calls figures “exaggerated”

The World Bank challenges the National Bank of Ethiopia’s figures of remittance inflow as its study indicates the country is getting at least 3.2 billion dollars yearly.

Despite an increase over the years, the official report of the National Bank Ethiopia (NBE) shows the amount of money the country is getting from remittance inflow has never surpassed the one billion dollar barrier.

However, the survey forwards “an astonishing amount of figures,” according to officials in the banking industry, which quadruples the latest remittance inflow to 3.2 billion dollar or 52.8 billion birr approximately.

In the budget year of 2008/09, the official data from NBE indicates that Ethiopia earned about 723 million dollar from international remittances transferred by the diaspora and foreigners.

According to the survey’s estimation, 14 percent of Ethiopian adults regularly receive an average of 600 dollars from abroad, at an average of 120 dollars per transaction and five transactions a year.

However, the outcome of the research “surprised” many in the financial sector. “We are astonished by the figures and I think it’s exaggerated,” said a remittance expert of NBE, who wants to remain anonymous, adding “we need to look at the research first before responding to it.”

Another official in the private banking business said the study seems to forget to take the official date as a basic for research “and I still have doubts about the outcome”.

But, the World Bank said, despite significant progress in methods of recording remittances all over the world, most official statistics in sub-Saharan Africa still underestimate the true size of remittance flows.

A consultant on remittances at the World Bank, Professor Donald Terry told Capital that he was not surprised that “people in Ethiopia are surprised”.

“This is a typical reception that you hear when you release the estimate of this kind,” he added. “The methodology used for the study is very accurate and has caused the same kind of stir across the world when it was first used ten years ago.”

Besides, the expert said, the number of diaspora Ethiopians is so significant that there is a very high chance of this figure to be accurate. Reports estimate that between 1.5 million and 2 million Ethiopians are living abroad.

“We are not trying to get into any confrontation and it’s simply to say that there are certain types of methodologies which are very difficult for official data collection to reflect accurately and this is one of them,” he said.

The professor urged the national bank to engineer a type of methodology of data collection that tracks back both informal and formal channels.

Informal vs formal

Although Ethiopians receive money from various countries around the world, the survey pinpointed United States, the United Arab Emirates and the United Kingdom as the top three countries from which family members regularly send remittances back home.

The survey, that examines remittance flow into Ethiopia, explores formal and informal channels used for transfers, associated costs, and how remittances are used by Ethiopian families.

Remittance companies and banks are the most common places for Ethiopians to receive international remittance.

Among 2,412 Ethiopian adults interviewed in the research, just under two thirds (64 percent) receive money at a remittance company and 21 percent receive remittances through banks.

However, fourteen percent of Ethiopian receivers rely on family members or friends traveling to and from Ethiopia to receive their money.

“There is a big chunk of money that the banking sector should work on to direct it to the formal sector,” said another World Bank expert in a meeting that was organized to announce the results of a national survey profiling remittance inflow to Ethiopia in 2009.

According to the research, international remittances have a major impact on the financial situation of the Ethiopians who receive them.

In addition to helping recipients afford basic necessities, some recipients are also leveraging remittances for the future through investment in education, small businesses, homes and savings.

Most Ethiopians who receive remittances rely on this money to cover at least some of their daily expenses such as food, clothes, housings, utilities and medicine. “In fact, a third of the respondents say that all of their remittance money is used for their daily necessities,” the study indicates.

Beyond the clear impact that remittances have on the direct recipients, the reach of international remittance stretches across the country.

Very few receivers say that they are the only person who benefits from the money they receive. Each international remittance sent to an individual in Ethiopia impacts an average of three people.

Furthermore, one fifth (20 percent) of international remittance recipients say they send a portion of this money to someone else in another part of Ethiopia.

Africa’s perspective

Remittance flows represent a significant share of national income and foreign currency earnings for Ethiopia and many African countries.

The amount of remittances to Sub-Saharan Africa is significantly greater than foreign investment and official development assistance to the region combined.

However, according to the World Bank many policy makers and financial institutions in Africa overlook the effective role that remittances can play in dealing with economic shocks, access to finance and poverty reduction.

Despite significant progress in methods of recording remittances globally, most official statistics in sub-Saharan Africa still underestimate the true size of remittance flows.

In 2009, it exceeded 21 billion dollar and it is expected to grow by almost 2 percent in 2010 despite a weak global economy.

This is partly due to a focus of data collection efforts on formal channels, such as banks. Improving remittance data collection can lead to a better understanding of channels used and play a role in leveraging the development impact of these substantial resource flows for recipients and the communities they live in.

Policymakers and remittance service providers can play an active and supportive role in leveraging the development impact of remittance transfers by facilitating formal remittance flows, thereby reducing the costs of remittance transfers, the World Bank suggested.

Source: Capital Ethiopia