Capital

Road Master Plan affirms train station survival

By Muluken Yewondwossen

Road Development Revolving Fund to be established

By Groum Abate

AAU to launch first-ever film school in under, post graduate programs

By Abiy Demilew

Two months jail time for smoking

By Kirubel Tadesse

MPs urge transparency on Ethio-Sudan border issue

By Kirubel Tadesse

Al amoudi launches First Energy Bank Capital hits $1 bln

By Groum Abate

Fistula Medical director, doctors resign over conflict

By Tedla Yeneakal

Opposition still doubtful about government response to the drought

By Kirubel Tadesse

AACSA blasts new banking bill

By Groum Abate

Major Saudi agribusiness firms invest on 1/2mln hectares

By Tedla Yeneakal

Africa’s Unnatural Disaster

By Sameer Dossani

Exporters raise questions on Bank procedure

By Addis Mulugeta

WFP purchases inaugural stocks from ecx: the newly opened commodity exchange in ETHIOPIA

Economic Diplomacy among priorities: MoFA

By Kirubel Tadesse

Association to export processed oil seed

By MulukenYewondwossen

Nigeria to send peace keepers to Somalia

By Groum Abate

Social Security Agency vows to participate in investment

By Addis Mulugeta

Ethiopia slips two places in Failed State Index

By Groum Abate

One laptop per child debuts

By MulukenYewondwossen

Young woman found dead in student housing complex

By Addis Mulugeta

Government keen on urea, implementation delays

By Muluken Yewondwossen

Road Master Plan affirms train station survival

By Muluken Yewondwossen

After the participants of the June 10, 2008 conference of the Ethiopian Heritage Trust facilitated, protested against the reported plan to demolish the Ethio-Djibouti Railway Enterprise headquarters to make way for road construction, on June 26, 2008 the Addis Ababa City Road Authority (AACRA), announced that the plan never intended to pass through the area where the station is located but rather would circles the 100 year old complex.
Fekade Hailu (Eng.), head of AACRA, told Capital that his office organized the press conference after the City Information Bureau alarmed him about the rumor.
According to the plan the road will be constructed around the station, even leaving a green area in front of the station. The road will connect Gofa – Kirkose [behind the station] to Churchill Street [a road that connects the area where the station stands, to the Municipality].
Fekade Hailu, head of AACRA told journalists that the plan was laid out years ago and revised in February 2006.
“The Master Plan never touches something which is the city’s historical heritage,” added Fekade.
The road design indicates that the one km span that crosses the station will stretch on the Enterprise compound east, and west side of building and will break the west side railway line from the east. The road will have a width of thirty and forty meters. The open site area in front of the Station will be a green area. AACRA is to handle work on the one km road that will commence in the next fiscal year.

Road Development Revolving Fund to be established

By Groum Abate

A revolving fund proclamation that is expected to solve the recurring problems that have occurred from delayed payment from donor or lender organizations that finance road projects, has been presented to parliament for ratification.
The Road Development Projects Revolving Fund would get a start up capital of 75 million birr. The fund would be used for payment to contractors when loan or funds are delayed.
The fund will focus on paying consultants and contractors that claim payment for road projects and the fund would pay the contractors and would take the money from the donors and lenders after it pays from its own budget.
The idea behind a revolving fund is that an organisation has a reserve of money (the fund) which is used to pay to one or more contractors if the money for the project is delayed. Over a given period of time, the lenders or donors are expected to pay the original sum that restocks the fund.
The main differences between an informal rotating credit scheme (a co-operative for example) and a formal revolving fund, lies in the source of the initial fund, the scale of lending and the structure of the credit management.
Whilst informal revolving funds are based on paid for by community savings, a formal revolving fund usually uses ‘seed’ money from an outside organisation or agency.
The seed money is used to pay for the operational structure (buildings, office equipment and vehicles for example) and repayments by the original borrowers over an agreed period of time, puts money back into the fund for other projects. If managed well, revolving funds are an excellent means of making available money to contractors.
It would also save money that would be spent on litigations and delayed payment penalties that occurred from time to time.

AAU to launch first-ever film school in under, post graduate programs

By Abiy Demilew

Addis Ababa University (AAU) is to launch the first ever film school in under and post graduate programs, very soon, to contribute its share to the future of the Ethiopian film industry, Professor Abiyi Ford told Capital.
Upon completion of the first initiative on strengthening the future of the Ethiopian film industry, held here in Addis, 22 – 23 June, Professor Abiyi revealed Capital that, the workshop which involved the Ministry of Culture and Tourism, Addis Ababa University, local film-makers and the International Emerging Talent Film Festival (IETFF) based in Monaco; has enabled the better understanding of the sector.
“We’ve reached on a common consensus on the importance and values of having an organized cinema industry,” Abiyi said. “This benefits the nation and its people in sending out the positive image of the country for the rest of the world.”
Ambassador Tadelech Haile-Michael, the former Head, women’s Affairs in Prime Minister’s Office and the currently Ethiopian Ambassador to Côte D’Ivoire, who was here on an un-official visit, after the attendance of the workshop, said: “The time is now. If we don’t use this opportunity no-one anywhere is waiting for us.”
“We have to be part of the global situation that is moving so fast,” Ambassador Tadelech said. “We have to realise that the film industry can bring a lot of money and can help promote the positive image of our country and increase the number of tourists.”
In filling the knowledge gap and producing educated professionals in the sector, Abiyi Ford said the university will engage itself in giving out professional trainings in long and short terms.
“We have been studying this possibility quite for many years,” Abiyi said. “Now, having support from our partners, we will be moving towards the actualization of this study very soon.”
The absence of a central organ in the industry has also been seen as one of the major challenges observed, according to the professor. “This is one of the areas we have seen bigger importance.”
For many years now, Ethiopia never had a central organ for cinema development, production, promotion, distribution and exhibition after the oldest, state-owned Ethiopian Cinema Corporation, which in its more than 50 years of existence, had only put out four 35mm movies before it chased itself out of the scene a few years ago.’Guma’ ‘Aster’, ‘Hirut Abatua Man New’ and ‘Behiwot Zuriya’ are all the Corporation had to offer for its existence with its qualified staff, most of who were trained in Eastern European countries, have failed to save the existence of the Corporation and left with it, being ‘unproductive’.
The Ethiopian film initiative which gained momentum this week, with the participation of up to hundred film-makers and media professionals from Ethiopia and at least fifteen countries, including seven from the African continent; is believed to lay a strong foundation to enhancing the quality of film productions by forming a central organ which facilitates and lobbies for a policy, technical, educational and other supports.
According to the organizers’ press release addressed to Capital, both the international and local film-makers have agreed on an ambitious three-point plan to strengthen the film industry in Ethiopia including liaising with the government to establish a film policy and to discuss the setting-up of a government agency to oversee the development of the local film industry.
The initiative also has decided to set up an umbrella film organisation to represent all individual film-makers and related associations in the country to provide mutual support for all practitioners in the film industry, and act as a unified lobbying group on film industry matters. It also realized the the formation of an ad hoc group of local film-makers to plan how such an umbrella group would operate.
According to the organizers, these all will be accompanied by improving the professional standards of the Ethiopian film industry by encouraging short-term training to raise craft skills, production management, marketing and distribution. In the longer term the Ethiopian Film Initiative is supporting the development of permanent film centres in the country, including establishing a film department at Addis Ababa University.
Professor Abiyi said, “We have many stories to be told to the world in our films, so I think this is the right time.”

Two months jail time for smoking

By Kirubel Tadesse

If violating the no smoking signs on board public planes and operating portable electronic device, the new proposed Civil Aviation Proclamation states that, the person will be liable to stiff fines of up to 15, 000 ETB or a term of imprisonment not exceeding two months.
Leoul G.Medhin, Acting Manager of Ethiopian Airlines Public Relations, told Capital that all flights of Ethiopian Airlines are non- smoking. “We always inform our passengers that our flight would be non-smoking before and while they are on board” he added.
According to the proposed proclamation presented to the House of Peoples’ Representatives last Thursday, June 26, 2008, apart from operating a portable electronic device and smoking on board, any person who unlawfully and intentionally tampers with a smoke detector or any other safety related devices installed on board of an aircraft would be penalized with a maximum of 100,000 ETB and up to two years imprisonment.
Internationally, on non-smoking flights, smoking in lavatories is more common and smokers simply deactivate the smoke detectors. If caught, fines are 1,000 dollars for smoking plus 2,000 dollars for tampering with the smoke detector.

MPs urge transparency on Ethio-Sudan border issue

By Kirubel Tadesse

Opposition parliamentarians demanded the Ministry of Foreign Affairs (MoFA) to clear the ambiguity that is floating around on the Ethio-Sudan border issue while the Ministry presented its ten month report on June 24, 2008.
Bulcha Demeksa, chair of Oromo Federalist Democratic Movement (OFDM) told MoFA Minister Siyoum Mesfin that the public and the parliament do not know the details of the memorandum of understanding the government of Ethiopia and Sudan signed.
“All the ongoing Etho-Sudan border issues will be cleared if the government becomes transparent on the matter. Why isn’t a copy of this agreement available to us?” questioned Bulcha.
Though copies of the memorandum were not distributed to the members, Minister Siyoum explained the memorandum’s theme.
“The singed agreement details that no farmer of both countries would be displaced from their plots in any possible demarcation,” responded the Minister.
Lidetu Ayalew, chair of Ethiopian Democratic Party (EDP- Medhin) pointed his finger on the state owned media for not clearing the uncertainty while its foreign counterparts were covering the issue in detail.
“The Ethiopian Television (ETV) always reports on government related issues in a rather tiring routine but the Ethio-Sudan border issue didn’t make it to their program list despite the huge coverage foreign media gave it. The news was first ushered by the foreign media which chewed it in depth and then got the local media’s, ETV, due attention,” Lidetu wondered why there was a silence in government media during weeks the report swapped abroad.
Other MP’s like the Coalition of Unity and Democracy’s (CUD), Legesse Biratu, forwarded to the Minister their suggestions for resolving the ambiguity deepening into the public, they proposed for selected representatives to visit the border.
“A group composed of political leaders, elders and other parts of the public should deploy to the border and report back to the public via the House,” Legesse forwarded as a possible resolution for the border issue transparency climax.
According to MoFA’s report the Ethio-Sudan border was delimited as per 1902 and 1907 agreements signed between Ethiopia and Great Britain, then colonial ruler of Sudan. As per the 1902 agreement, a British national, Major Gwynn, had demarcated with some changes he disclosed in his report. After 1907 agreement, Gwynn also demarcated the delimited parts of the border in 1909. His demarcation was not in accordance to international standard [conducted by stating descriptive topographies, putting stones and other mechanisms] as the pervious two Ethiopian regimes had tried to re demarcate the border. In 1962 one group of experts conducted a survey that suggested the government endorse the Gwynn demarcation as it was found that it didn’t violate Ethiopian interests. Accordingly, the Imperial Ethiopian Government had an exchange of notes with Sudan in June 18, 1972.
MoFA in its report affirmed the statements of Prime Minister Meles Zenawi which explained that no demarcation has been started and no pillar has been put between the two countries border. So far various committees set up at different levels were conducting feasibility studies. According to MoFA, the remaining task is to re-demarcate the border as per the Major Gwynn demarcation which had followed the 1902 and 1907 agreements made between Ethiopia and Sudan.

Al amoudi launches First Energy Bank Capital hits $1 bln

By Groum Abate

The Ethiopian born Saudi business tycoon Sheikh Mohammed Hussein al Amoudi has launched the First Energy Bank (FEB) along with other share holders as board members.
FEB, the world’s first investment bank focused exclusively on the energy sector held its first shareholder’s meeting this week in Bahrain. Shareholders along with Sheik Mohammed Al amoudi include investors from Bahrain, Saudi Arabia, Kuwait, Libya and the UAE.
The initial start up capital of FEB reached one billion dollars with requests of other interested parties to join the bank as share holders.
According to Gulf News Daily Mr. Esam Janahi, FEB Chairman announced that the Central Bank of Bahrain has awarded it a wholesale banking license (Islamic Principles). Mr. Janahi welcomed the shareholders and presented the constitutional committee’s report of First Energy Bank’s business activities.
The news agency further noted that Sadoun Bargash Hamoud Al Sadoun, represents Sheikh Mohammed Hussein Al amoudi at the first meeting of the bank.
In his report, Mr. Janahi commented, “The huge and growing capital needs of the energy sector are best met by a bank that understands the industry as well as the world’s producing regions. FEB will be the first of its kind globally to offer both specific value-added advice and intelligent finance targeted to the energy sector. We look forward to serving the needs of a booming energy sector in the MENA region and in Asia and indeed across the world.”
“There is obviously momentum behind this kind of bank”, said Mr. Janahi in his report. “The over subscription to the capital raising was impressive. We ended up capping it at $1 billion from the initial $750 million, despite the fact it was several times oversubscribed.”
“Just as importantly, we have already had several serious inquiries from regional firms needing our expertise to help them increase their market share,” he reported to the Shareholders. “In the planning for this venture, we saw there was a huge opening for an institution to serve the needs of the MENA energy industry. The enthusiastic initial reaction provides strong confirmation,” noted Mr. Janahi.
The meeting’s six agenda items included the appointment of FEB’s Sharia Supervisory Board, external auditors KPMG and the initial Board of Directors.
The meeting also approved additional business related to the registration of FEB.
“According to the International Energy Agency (IEA) world oil demand will grow from 83.6 million barrels per day (mb/d) in 2005 to 116.3 mb/d in 2030. Without significant additional investment, the energy industry will be unable to meet this demand and the world will face an acute supply shortage,” noted Mr. Janahi.
“An estimate $8.2 trillion will be required globally in the oil and gas sector through 2030. Now that the world has entered an era of permanently higher prices, investors can expect to earn superior returns from investments in the energy sector,” stated Mr. Janahi.
First Energy Bank will be headquartered in Bahrain Financial Harbour.

Fistula Medical director, doctors resign over conflict

By Tedla Yeneakal

Four doctors including the medical doctor of the Fistula Hospital filed their resignations over a row that arose between them and the Chief Executive Officers claiming they have not been able to carry out their duties, sources disclosed.
Dr. Mulu Muleta, who was serving as medical director at the Fistula Hospital for the past 14 years, Dr. Ambaye Woldemichael, a surgeon , Dr. Bruck Taffese, surgeon and Dr. Hailegiorgis Aydemsisu, also a surgeon signed resignations on the same day, June 16, 2008 after the former served, ten years, and the latter two for eight years respectively.
“We simply cannot work with the new Chief Executive Officer, Mark Bennet,” read the letter of resignation they submitted.
According to hospital sources, the doctors’ demands ranged from being prevented from having a labor union as well as major intervention in their professions after Australian CEO Bennet was appointed.
“The Ministry of Health clearly knew what was happening but did not intervene to save the surgeons from leaving, it is a major blow to the hospital,” an employee said anonymously
According to independent sources, when Bennet went to Egypt on vacation a couple of months ago, where he was based before he took this post, the Medical Director embarked on some operational reforms that were not welcomed by the CEO when he came back to his office.
Dr Hamlin has recently informed all of the staff that she has handed over the leadership of the organization to the Board of Trustees and the CEO and that all staff should work together within this structure to ensure the future of the Hospital is secure.
On his part Bennet in a written statement sent to Capital explained that change within any organization always causes anxiety. As the organization has grown there has been a need for new systems of performance evaluation and accountability. Such changes are not easy to introduce. Recent requests for accountability, medical audit and review, have been met with resistance and have led to a breakdown in the working relationship.
“The statements made by these Doctors, with respect to the CEO are unfortunate and reflect the anxiety that they feel. The Trustees of the Hospital and Dr Hamlin, in no way agree with these comments,” Bennet stated. “While there is no doubt that the resignation of these doctors is a great loss in terms of the skills in surgery that they have developed over a number of years, the hospital will continue to provide services to poor women from the countryside, as it has in the past.”
More over, the statement added that the Hospital will utilise the capacity that it has in the remaining 7 Doctors (including Dr Hamlin), to train other doctors of good will to continue with its vision to serve women injured in childbirth throughout the country.
Currently the hospital employs about 250 people.
According to the official website of Fistula Hospital, in the late 1950s, two young doctors, Reginald and Catherine Hamlin, were dedicated obstetricians living and working in Catherine’s native Australia. Early in their careers, the couple practiced gynecology in Sydney, but they were eager to seek out and aid the women who needed them most.
They got their chance in 1959, when they were called upon to come to Ethiopia and set up practice in a hospital in the capital city of Addis Ababa. When they arrived, Reginald and Catherine discovered a very poor country with almost no resources for expectant mothers. The Hamlins planned to open a midwifery school at the Princess Tshai Memorial Hospital and to stay for three years.
Before the Hamlins came to Addis Ababa, there was no treatment available for fistula victims anywhere in the world. Most such injured women – and there were thousands – had suffered in silence for years.
In their first year in Ethiopia, the Hamlins treated 30 fistula patients.
The Hamlins worked for more than a decade to establish a fistula hospital, even through a military coup when most foreigners fled Ethiopia. Finally, in 1974, the Hamlins opened the doors of Addis Ababa Fistula Hospital. It remains the only medical center in the world dedicated exclusively to fistula repair.
Famous TV host Oprah Winfery also has a foundation dedicated to fistula victims. She has been involved in the initiative’s visiting the hospital when she came to Ethiopia as well as hosting Dr. Catherine Hamlin on her TV show, which has caught the attention of many internationally.

Opposition still doubtful about government response to the drought

By Kirubel Tadesse

One of the opposition groups in the House of Peoples’ Representatives, Ethiopian Democratic Party (EDP-Medhin) disclosed that government’s reports on issues concerning measures taken to alleviate the food shortage are unsatisfactory.
Using Opposition Day as an opportunity, EDP-Medhin motioned agenda concerning the food shortage for discussion. According to the Ethiopian Disaster Prevention and Preparedness Agency (DPPA) the shortage has occurred due to poor seasonal rains such as Belg. EDP-Medhin in its agenda explained that the government is yet to respond to the drought equivalent to its scale. Deputy Prime Minster Addisu Legesse was present in the house to respond to EDP-Medhin agenda. Addisu explained that the current food shortage is under control. Addisu who is also Minster of Agriculture and Rural Development explained that some 940,000 quintals of food grain and nutritious foodstuffs have been apportioned among recipients until late May 2008.
Addis blasted what he called irresponsible NGOs that are issuing reports of exaggerated numbers in order to consume a huge percentage of donations [Ethiopian government receives through its appeals] through operations.
Lidetu Ayalew (MP), chair of EDP-Medhin has argued that the government can not state that the food shortage is under control when it is a fact that the food shortage has cost lives. He told Capital that his party is seriously concerned about likely conditions in the coming few months. “The government is telling us that everything is under control but we worry that the coming months might result in a worsening situation in the affected areas as we are yet to feel the effects of Belg rains. Since the crops wouldn’t be ready now even though the rains were good, we fear that situation could get much worse than the current condition, “Lidetu commented to Capital.
Even if the Coalition for Unity and Democracy (CUD) and Oromo Federalist Democratic Movement (OFDM) commented on the agenda, Temesgen Zewdie didn’t forward any while Professor Beyene Petros, United Ethiopian Democratic Forces chair, was not in attendance. Temesgen later told Capital that he shares the seriousness of the agenda and only didn’t comment because he failed to notify the speaker’s office of his intention a day before the meeting, which is common practice in the house. Professor Beyene too explained to Capital that the agenda is among his party’s priorities. “In our capacity we sent people and had some areas affected by the food shortage assessed, for example in Wolayeta areas. We sent two letters to the DPPA notifying the situation and demanding a meeting but they failed to respond,” Beyene told Capital. According to Beyene his party too had proposed the same agenda but they were told that the government would address it so it decided to push its second agenda which concerns ethnic based conflict in some parts of the country.
According to DPPA’s recent appeal, 4.6 million people in nine regions; Tigray, Amhara, Oromiya, Somali, Gambella, Harari, Benshangul Gumuz, Southern National and Nationalities People State (SNNP) and Afar, are in need of immediate food assistance.

AACSA blasts new banking bill

By Groum Abate

The Addis Ababa Chamber of Commerce and Sectoral Associations (AACCSA) said that the new draft banking bill that gives the mandate to the National bank of Ethiopia to import and export goods including gold without notifying the customs authority of the country would create an undesired outcome.
The association has called for wide consultations by stakeholders on the revised draft banking business proclamation and the proclamation of the new National Bank formation before the bill is submitted to parliament for endorsement.
Association members affiliated to financial institutions on Friday held a half-day discussion on issues raised by the bill.
The participants said that the new bill gives unconstitutional right to the central bank and feared that it would create havoc. They also raise their concern that the central bank could easily abuse the bill.
On the occasion, Association president Eyesuswork Zafu suggested that the government holds wide consultations with stakeholders on the bill, which he said has provisions that may discourage private sector involvement in the financial sector.
The existing proclamation, he said, has instruments of regulation and control on the operations of the financial sector.
Although the bill underwent public hearing at parliament on two occasions, there is still a need for more consultations with stakeholders, he said.
He said the proceeding of the discussion will be submitted to parliament and the prime minister’s office.
Two weeks ago, bankers representing the private and public financial sectors held a debate over the new draft proclamation of the National Bank of Ethiopia (NBE) at the House of Federation.
NBE Governor, Tekelewolde Atnafu and Budget and Finance Affairs Standing Committee Chairman, Wana Wake, jointly defended the proposed bill.
Bankers discussed the controversial proclamation that gives unlimited provision of loans to the government, which the bankers questioned, saying it would exacerbate inflation that is already critical.
The bankers also raised the issue of proclamation 471/98, relating to the accountability of the NBE to the Prime Minister. They argued that the Council of Ministers at large is accountable rather than the Premier individually.
In the previous proclamation, the Ministry of Finance was accountable before it was restructured to the Ministry of Finance and Economic Development (MoFED).

Major Saudi agribusiness firms invest on 1/2mln hectares

By Tedla Yeneakal

Major Saudi based agribusiness companies, including one of the biggest firms in Saudi Arabia, the Savola Group, are set to invest on 500,000 hectares in Ethiopia, part of a policy of the Saudi government to grow strategic grains abroad to protect the country from crisis in world food supply, diplomatic sources disclosed.
Prime Minister Meles Zenawi, while holding talks this week with the business delegation led by Saudi’s Minister of Commerce and Industry, Sheik Abdullah Ahmed Zainal, unveiled that the government has already designated more than 500,000 hectares of land to Saudi Arabian investors.
According to Sheik Zainal the delegation’s is main objective is aimed at obtaining first hand information on the existing investment options in the agriculture sector and plans to launch various investment projects in Ethiopia in the area of agriculture as of October 2008.
“Saudi Arabia plans to grow strategic grains abroad to protect the country from crises in world food supply,” a Saudi government official was quoted as saying, “We have to be sure we have enough food coming to the country later on,” he added referring to crises in world food supply in recent months.
According to information obtained, the government was also in talks with officials in Sudan, Egypt, Ukraine, Pakistan and Turkey to allow Saudi companies to establish projects for wheat, barley, soya bean, rice and animal fodder.
Ethiopia is endowed with abundant agricultural resources. Having an altitude ranging from 180 meters below sea level to 4,620 meters above sea level, the country is characterized by diverse physical features that comprise 18 major agro-ecological zones and 62 sub-zones each having its own physical and biological potential.
Out of the total land area of 113 million hectares, about 56 percent is regarded as suitable for cultivation. However, only 14.8 percent of the total land is currently under cultivation. About 3.7 million hectares of land is available for irrigation, but only 160,000 hectare (4.3 percent) is developed and used. Investors have been leasing agricultural lands or crops.
Agriculture is the mainstay of the Ethiopian economy, and has the soil and climate for the production of a variety of crops. Currently, as many as 146 types of crops are grown. The major food crops are cereals, pulses and oilseeds. The main cereal groups include teff, barley, wheat, maize and sorghum. Pulses comprise peanuts, beans, peas, chickpeas, lentils, rough peas, fenugreek, soybeans, haricot beans and several varieties of oilseeds.
The only strategic grain in which Saudi Arabia has been self-sufficient in is wheat. But this year the government said it would replace domestic production with imports over a period of eight years to stop depletion of underground water reserves.
In the last 10 years, according to the statistics of Ethiopian Investment Agency, Saudi investment volume has reached about 3 billion USD.

Africa’s Unnatural Disaster

By Sameer Dossani

While the mainstream media doesn’t always ignore the pressing issue of hunger in Africa, it rarely explores the root causes of this problem. Behind most news on the issue, there’s an assumption that casts hunger as a natural result of unfortunate weather conditions, coupled with bureaucratic inefficiency and bad economic planning.
With this in mind, in 2005 the Bill and Melinda Gates Foundation announced a plan to “help millions of small-scale farmers lift themselves out of poverty and hunger.” In the years since, the foundation has been joined in its efforts by a number of other organizations that have founded the Alliance for a Green Revolution in Africa (AGRA).
According to AGRA’s website:
AGRA programs develop practical solutions to significantly boost farm productivity and incomes for the poor while safeguarding the environment. AGRA advocates for policies that support its work across all key aspects of the African agricultural “value chain”-from seeds, soil health, and water to markets and agricultural education…. A root cause of… entrenched and deepening poverty is the fact that millions of small-scale farmers-the majority of them women working farms smaller than one hectare-cannot grow enough food to sustain their families, their communities, or their countries.
AGRA’s assumptions — and those of the mainstream media — rest on the premise that the Africa’s hunger problem is one of production. While production may be part of the story, it’s far from the complete picture. The heart of the agriculture crisis that Africa and the world are currently experiencing lies in the failed policy paradigm promoted by the World Bank and the International Monetary Fund, institutions that still have enormous control over economic policy in many African countries.
World Bank Role
The World Bank’s intervention in African agriculture began in 1981 with the study Accelerated Development in Sub-Saharan Africa: An Agenda for Action. Also known as the Berg Report, the study paved the way for World Bank involvement in the African agriculture sectors. The Berg Report prescriptions represent the first incarnation of the market fundamentalist policies that have been dominant in the African agricultural sector thereafter.
Since the Berg report, the World Bank has insisted on market liberalization and privatization of Africa’s agricultural markets. Subsidies of all kinds have decreased since 1981 and most state marketing boards and crop authorities have been greatly weakened or eliminated. No one — including the World Bank — denies that the net result of this policy is to expose small farmers to increased shocks. But the World Bank argues that shocks may be beneficial, in that exposure to actual market fluctuations will lead small farmers to grow high-value export crops instead of low value crops for local consumption. This “rational peasant” theory, as it was known in the 1980s, argued that small farmers shifting to high value exports such as coffee, sugar, cut flowers, etc. would ultimately bring in more money to the domestic economy, enabling rapid growth and development.
Market Fundamentalism
This theory — that government regulation should get be eliminated so that the market can do its job of “getting the prices right” — underlines World Bank thinking not only in the 1981 Berg report but also in their 2008 World Development Report, titled Agriculture for Development. Twenty years of the same failed policies are apparently not enough for the World Bank to change its tune.
The World Bank’s continued market fundamentalism is difficult to understand, especially in light of the fact that after more than 25 years of imposing these policies in Africa and Latin America, success stories are few and far between. Those countries that do have productive agricultural sectors (almost none of which are in Africa) either rely on huge landholders to be productive (Brazil, Argentina, Chile) or on massive subsidies (India) or both (U.S., EU). The countries that have eliminated their subsidies and privatized their grain boards, including many in Africa, are those that are doing the poorest.
In fairness, one or two changes can be seen in the World Bank’s thinking between 1981 and today. The first can be seen as an admission of failure — migration to more developed countries and the subsequent flow of remittances to families left behind, is mentioned as part of a strategy for reducing rural poverty (p. 73). While this is certainly true in the current global economy, there are few who would argue that forced migration is a path to development. Anecdotal evidence suggests that remittances may have a slightly greater correlation to development than the correlation between aid and development, but this is hardly high praise, considering the failures of the aid programs of the last 30 years.
The second concession that the 2008 WDR makes to reality (as opposed to market fundamentalist ideology) is an allowance for targeted subsidies. While subsidies have historically been a four-letter word for the World Bank, in recent years the Bank has come under fire for insisting on market liberalization in developing countries while acknowledging that developed countries have much higher subsidies than those in African countries. The World Bank’s answer to this is to continue to talk about various kinds of subsidies that distort trade and the need to stay away from those policies, while simultaneously allowing for the possibility of targeted subsidies to help the poorest of farmers who may be the most vulnerable to price shocks. This may be a step forward, but it is a small one and does little to relieve the burden of over 20 years of lost African development for which the World Bank bears a large share of responsibility.
The Real World
If one is willing to look at the events of the last 30 years without the quasi-religious belief that free markets lead to development and growth, one would undoubtedly find that the opposite is true. In his groundbreaking work Kicking Away the Ladder (2003), Ha Joon Chang documents the development of every industrialized country, showing that protectionist policies were a fundamental part of development strategy in almost every case. The process of development that emerges from this story is not maximizing comparative advantage (for if so, the U.S. would be a sparsely populated country of fur traders and fisher people) but rather shifting comparative advantage to high value goods through calculated market distortions. In the case of the U.K. and the United States, those market distortions originally came in the form of colonialism and slavery. But market distortions continue in the U.S. today in the form of agriculture and steel subsidies, not to mention the tremendous government spending on biotechnology and defense, which largely serves as a subsidy for those sectors.
In light of these fundamentals of developmental economics, the World Development Report 2008 can be seen as an ideological continuation of the failed agricultural policies of the last 20 years, without an adequate analysis of why that period has been a failure for countries who would rely on agricultural exports as a path to development. The report does point out that a few countries (Brazil and Chile are the examples given) have successfully used agriculture to increase growth, but in Brazil and (to a lesser extent) Chile, small farmers are all but extinct, and agriculture is big business. Given the preoccupation with small farmers and poverty alleviation in other parts of the document, the examples are odd.
In addition to the failures of the free-market paradigm, the ongoing crisis of food prices has exposed global agricultural production as a disaster. Since about 1970, the World Bank, other international financial institutions and the private sector have succeeded in completely transforming agriculture from a primarily local affair to a complex industrialized process. Monocropping, over-reliance on chemical pesticides and fertilizers and trans-genetic manipulation have in some cases increased yields; but these practices have not led to a significant reduction in the number of hungry people in the world. The recommendations of the Alliance for a Green Revolution in Africa and the World Bank amount to insanity - recommending more of the same and expecting better results.
Perhaps most shocking is that this new push towards increased globalization and industrialization is occurring at precisely at the moment when many in the United States are moving towards a diet that is both local — produced somewhere in the vicinity of where it is consumed — and organic — produced without the use of synthetic hormones, chemical fertilizers, pesticides, and genetic modification.
In the United States, Europe and elsewhere, many are beginning to understand that industrialized agriculture benefits neither those who produce nor those who consume food. In the current food crisis, more than 25 countries and the European Union have imposed tariffs, subsidies, price controls or other measures to protect consumers from the global free market. So why the double standard when it comes to Africa?
For those interested in solutions, the organic and local movements aren’t far off the mark. What producers and consumers in many parts of the world are beginning to understand is that the way that farmers have been growing food for millennia is more or less a good system. While there may be room for technology, (drip irrigation systems, for example) that innovation should not alter the food product nor add layers of cost.
Many parts of Africa have an advantage in that they have never really lost their traditional relationships with the land. The problem has been that cheaper food from Europe and the United States is often dumped on African countries, undercutting the possibility for farmers to earn a living from their production. In the case of Africa, all that may be needed is a sensible trade policy to protect those who already grow enough food for all Africans.
Sameer Dossani, a Foreign Policy In Focus contributor, is the director of 50 Years is Enough and blogs at shirinandsameer.blogspot.com. This commentary is adapted from a longer paper soon to be published by Africa Action.

Exporters raise questions on Bank procedure

By Addis Mulugeta

Exporters raised questions related with Bank procedures in the second sectoral meeting with Addis Ababa Chamber of Commerce and Sectoral Association (AACCSA) held on June 26, 2008 at the Exhibition Center.
According to the exporters, the current draft proclamation the National Bank has not initiated exporters. The break down of Bank loan is one of the obstacles to the export capacity of exporters they said
According to Eyesuswork Zafu, President of AACCSA, the reason why the government changed its bank procedure is because business persons have not used bank loans effectively. However, the money supply of the national and /or commercial bank is not enough compared to the population of the country.
Tamerat Admasu, deputy secretary of AACCSA, on his part said that of 11 sectors the second meeting was with exporters to elect five executive committee members. Each of the executive committee members will meet once a month to pronounce the problems of exporters including banks.
He said that to provide the necessary business services, AACCSA changed its procedure of delivering information to business persons. AACSSA had held its first meeting with owners of import and travel agents.
He noted that the export sector plays a big role in the development efforts of the country. However, they have enormous problems and challenges in related with banks services. The election of the executive committee is expected to minimize problems and challenges of exporters with AACCSA.
AACSSA could identify problems related with exporters and will study the questions carefully together with the executive committee and the input will be addressed to the government as well, it was stated.

WFP purchases inaugural stocks from ecx: the newly opened commodity exchange in ETHIOPIA

The UN World Food Programme (WFP) said today that it has completed its inaugural purchase from the newly opened Ethiopia Commodity Exchange (ECX), which launched live trading operations on 24 April.
WFP has purchased 100 metric tons of grade one white pea beans from the ECX, where the average cost for a metric ton of pea beans is slightly lower than the current market price. The pea beans will be used to support WFP beneficiaries on the urban mv -AIDS programme that helps HIV / AIDS infected and affected households and individuals to meet their basic nutritional needs, and to develop the~ capacity to cope with the impact of HIV!AIDS.
The Ethiopia Commodity Exchange aims to provide a market place where buyers and sellers can meet to trade commodities, and are guaranteed quality, delivery and payment.
“WFP supports the objectives behind the Ethiopia Commodity Exchange initiative in helping to streamline commodity markets in the country and enhance efficiency and transparency,” said Mohamed Diab, WFP Country Director in Ethiopia. “Here in Ethiopia, WFP has bought significant quantities of locally produced commodities on the markets, over the years. We applaud innovations that seek to coordinate better marketing systems, and to assist the market itself to function in such a way that serves the needs of all concerned.”
WFP believes that procurement of locally produced food is an untapped potential for economic development and can have a positive impact on development initiatives in many countries. Local procurement allows quick access for WFP to food stocks that can be used on its programmes to assist millions of needy and vulnerable men, women and children, and also injects much needed resources into the local economy.
“We are pleased that WFP, the world’s largest grain buyer, has gained the confidence to use our system for its procurement,” remarked Dr. Eleni Gabre-Madhin, Chief Executive Officer of the ECX. “This presents an exciting opportunity to marry food security with market development objectives, through procuring in an efficient and transparent system that incentivizes Ethiopia’s small farmers.”

Economic Diplomacy among priorities: MoFA

By Kirubel Tadesse

Targeting to find markets for new national products and also to expand the existing markets, the Ethiopian Ministry of Foreign Affairs (MoFA) has been striving to attract investments, Minister Seyoum Mesfin told the House of Peoples’ Representatives.
MoFA has been working to persuade buyers of Ethiopian products in twenty four missions in cities such as Moscow, Tokyo, Abuja, Washington, Cairo, Paris and others. Among notable achievements of MoFA’s economic diplomacy conducted to support the nation’s poverty eradication strategy, one is the successful introduction of England’s Textline Limited Company to the local Ma Garment Company. The two companies have secured a deal as the former agreed to buy products worth 300, 000 USD. Starbucks, world’s leading coffee retailer, roaster and brand of specialty coffee, has also signed an agreement to buy textile products from local company, ALMEDA Textile Factory.
Italy’s Extime ESC is also to buy 100, 000 pair’s of shoes form Peacock shoe factory.
“Our diplomats are eagerly engaged in promoting our investments that they are even carrying some local products in their briefcase, “Minster Seyoum told the house.
In its ten months performance report submitted to parliament last Tuesday June 24, 2008, MoFA explains that it has been issuing company profiles to potential buyers.
Opposition MP Temesgen Zewdie had congratulated MoFA on its achievements in its economic diplomacy. “It is really something to be proud of, “Temesgen told Minister Seyoum, “ it should not restrict itself only in issuing company profiles since introducing major investment sectors and preparing investment opportunities would further encourage more investment flows.”
MoFA on its report pointed out that slow response on samples form exporters is among challenges it is facing. MoFA in its report also stated that it is striving to build a good image for the nation.

Association to export processed oil seed

By MulukenYewondwossen

Some members of the Ethiopian Exporters Association of Oil seeds, Grain and Spices are working with foreign companies to start processing oilseed products in joint venture.
According to Elias Genete, president of the Association, the members were focusing on the export of oil seed, grain and spices to different countries, but recently some of them have started a connection with clients out of Ethiopia to open a factory under joint venture to produce finished products in the country.
He also told Capital that as compared to exporting raw materials, exporting finished products earns a better income. Potential joint venture companies from Germany, the Netherlands and China are showing interest.
Experts who are involved in the sector mentioned that currently many companies who were buying raw materials from Ethiopia are showing interest to be buy finished oil seed products.
The Association is currently playing a big role for the members to create links with companies abroad on capacity building and to find a market with SNV Holland, which is a non-governmental organization.
The Association received a license from the government five years after its establishment in 1999. Currently, the Association that was established by five exporters has more than fifty members and 85% of the country’s export goes through it. Its main objective is to promote the country’s product of oil seeds, grain and spices to overseas customers. Following the Association’s promotion, exports to China now consist of over 50% of exports.

Nigeria to send peace keepers to Somalia

By Groum Abate

The Nigerian military has sent a reconnaissance team to Somalia and is expected to deploy troops there soon as part of an African peacekeeping force, Reuters reported from Kampala, Uganda.
In March 2008, ten Nigerian commanders were in Somalia assessing the situation for sending peacekeepers to the region.
The African Union had planned to send 8,000 soldiers to the capital Mogadishu to support the U.N.-backed interim government, which faces an insurgency by Islamist rebels.
But deployment of the full force has been repeatedly delayed since last year as lack of funds and unrelenting violence in the city led several nations, including Nigeria, to re-examine offers to provide troops.
A smaller contingent of 1,600 Ugandans and 600 Burundians has been unable to stem the chaos. Major Barigye Ba-hoku, the Ugandan spokesman for the AU force, said a Nigerian military team visited Mogadishu last month.
“We are informed that Nigerian peacekeepers will join the mission anytime,” he told Reuters in an interview in Kampala. “This would be good news for a Somali nation that is desperate for peace.”
The AU force, known as AMISOM, is meant to replace Ethiopian troops whose presence has inflamed the insurgency since they helped Somalia’s government oust an Islamist movement at the start of 2007.
Talks hosted by the United Nations in Djibouti earlier this month produced a tentative peace deal between Yusuf’s government and some members of the opposition. But it has had little impact on the ground.
The UN Department of Peace Operation planned to send a new mission to Somalia. Under consideration are relocating Nairobi-based UN personnel dealing with Somalia to Mogadishu, boosting the UN presence in Mogadishu and other areas or south and central Somalia or deploying up to 28,500 UN troops and police provided there is “a viable and inclusive political process and an agreement on the cessation of hostilities.”
Another option would involve sending “an impartial stabilization force formed by a coalition of willing states of about 8,000 highly trained and capable troops, together with police officers,” before political and security agreements have been finalized ahead of a withdrawal of Ethiopian troops.

Social Security Agency vows to participate in investment

By Addis Mulugeta

To increase capacity, the Social Security Agency has vowed to participate in investment. This was explained during a press conference on June 27, 2008, at the Social Security Agency hall.
According to Dhaba Oria, Director General of the Social Security Agency, it has already identified the investment sectors which would be profitable.
The agency will not enter risky business, but investments with liquidity and which are useful to the agency.
He said that at the end of this year hopefully the agency will complete a new procedure including, using Information Communication Technology (ICT). There is a plan to networking Woreda teller offices with the Federal level and establishing e-government system to deliver and access information to the community as well.
He added that to adopt the new system of the reform area and procedure, the agency has plans increase the capacity of former employees, and add additional qualified and professional workers to the agency.
In addition, one of the basic issues that the agency will include is that the private sector in the system are equally benefited with government employees at retirement period.

On the other hand, the agency admitted that they do not have enough teller offices in the country. Meanwhile, to reduce the crowding of people and by considering other problems, the agency has increased the number of teller offices in Addis Ababa from 40 to 90 with the help of Addis Credit and Savings Institution.
At the woreda level however, it plans to expand offices to the grassroots.
Government and private banks, post office, micro finances and even movable systems will be the best areas for of retired people to receive money.

Ethiopia slips two places in Failed State Index

By Groum Abate

Ethiopia has dropped two places in the annual “Failed State Index” released in Washington on Monday. The poor showing was attributed to the demographic pressure and external intervention.
The survey is conducted by Foreign Policy, a bi-monthly journal, and the Fund for Peace, a non-governmental research organisation — both based in Washington, USA.
They place Ethiopia and Uganda at position 16 in the 177-nation survey. Ethiopia was ranked as the world’s 18th most unstable nation in last year’s index.
The Failed State Index is one of several global scorecards compiled by US thinktanks that purport to rank nations on a variety of social, economic and political scales. The respective rankings carry varying degrees of influence. The Failed State Index, for example, is attracting a modest degree of attention from international media.
In this survey, countries are ranked in accordance with 12 indicators with the aim of measuring their vulnerability to internal strife as well as the strength and stability of their civil societies.
Ethiopia’s poorest grades are in the categories of “demographic pressures”, and “factionalised elites”. Its highest score comes under the “external intervention” and “economy”.
Africa accounts for seven of the 10 states with the highest degrees of failure in this year’s index.
Somalia is judged the world’s most dysfunctional country, followed by Sudan, Zimbabwe, Chad and Iraq. The Democratic Republic of Congo, Côte d’Ivoire and the Central African Republic are also included in the 10 most unstable nations.
Norway was listed as the world’s most stable state in the latest index.
There are 177 states included in the 2008 index, the same number of states that were assessed in 2007. In 2006, 148 countries were ranked, with 75 states ranked in 2005. A small handful of countries were not included because of a lack of data.
The top 20 failed states
1 Somalia, 2 Sudan, 3 Zimbabwe, 4 Chad, 5 Iraq, 6 D. R. Congo, 7 Afghanistan, 8 Cote d’Ivoire, 9 Pakistan, 10 Central African Republic
11 Guinea, 12 Bangladesh, 12 Burma, 14 Haiti, 15 North Korea, 16 Ethiopia, 16 Uganda, 18 Lebanon, 18 Nigeria, 20 Sri Lanka
The least failed states
161 United States, 162 Portugal, 163 Japan, 164 Belgium, 165 Luxembourg, 166 Netherlands, 167 Canada, 168 Austria, 169 Australia, 170 Denmark.
171 New Zealand, 172 Iceland, 173 Switzerland, 174 Ireland, 175 Sweden, 176 Finland, 177 Norway.

One laptop per child debuts

By MulukenYewondwossen

Five thousand lap tops, valued at 940,000 dollars, were distributed to four selected primary schools as part of the One Laptop Per Child Program (OLPC) first phase. The Program is supported by Engineering Capacity Building Program (ECBP).
The XO laptops are donated by the city of Florence and OLPC.
The schools are, Menilik, Atse Naod Primary schools in Addis Ababa, Muloosayoo in Oromia and Rema in Amhara. The criteria for the selection were the willingness of school directors and staff to engage in the implementation, representation of less or least privileged parts of the society in the school and the size of the school.
Eskender Andualem, training expert of OLPC, told Capital that in Ethiopia there are over 14 million primary students shortly the program will give lap tops to each of these students.
One Laptop Per Child (OLPC) is a project working to provide educational opportunities to the world’s poorest children. OLPC also aims to provide access to libraries of knowledge, ideas, experiments and art that others have created as windows into the world and as examples and reference on which to build. In the process, as children study new things and add new ideas and experiments, they will be able to update the knowledge they share with those around them.
During the pilot phase of this project 170 teachers from the four selected schools were given OLPC teachers’ training. As the laptops have now arrived, the teachers will be ready to integrate them into their classrooms on the first day of school in the new term. In addition, the text books the students use for a variety of subjects were prepared in a digitalized format and will be loaded onto XOs, minimizing the number of texts needed in the schools.
ECBP brings OLPC to Ethiopia in order to provide children with new educational opportunities. ECBP is an Ethiopian program established under the Ministry of Capacity Building. It works towards creating employment opportunities for students through reform of Universities’ faculties of technology, TVET reform, improved Quality Infrastructure of Ethiopian products to be competitive in the world market and strengthening the private sector which ECBP considerers to be the engine of development.
OLPC was founded by Nicholas Negroponte with a core of Media Lab veterans, but quickly expanded to include a wide range of exceptionally talented and dedicated people from academia, industry, the arts, business, and the open-source community. Each individual involved brings a unique skill set, and a deep personal passion, to the project.

Young woman found dead in student housing complex

By Addis Mulugeta

The victim’s body was found in one of the apartments in the Anker Studentbolig complex in downtown Oslo, just across the Aker River from the popular Grünerløkka district.
Police have charged the victim’s 27-year-old husband, and issued warrants for his arrest both in Norway and internationally. He is a citizen of Ethiopia.
The 19-year-old woman was a student. She is a Norwegian citizen but has roots in Ethiopia as well.
Police withheld many details of the case, but said they found blood in the apartment that quickly led them to believe the woman was murdered. They were first summoned to the complex shortly after 1am, by an acquaintance of the woman.
Another woman living in the complex told Aftenposten that the murder, initially referred to as a “suspicious death,” didn’t surprise her. She said residents have been robbed in the complex “and it stinks of hash in the corridors. People sell drugs right outside.” She said she was planning to move.
Per Carlenius, managing director of the complex was traveling in St Petersburg when he got a call about the death, and was heading back to Oslo when Aftenposten called him at about 7am.
“This is very sad,” he said. “The neighborhood has problems, but I’ve always been glad nothing serious has happened inside the complex. We work hard to avoid such things.”
He said he was most keen on finding out exactly what happened, not least to ward off concern among the roughly 1,000 students who are on a list to obtain housing in the complex this fall.
“Many students and parents around the country are wondering what happened, and whether it’s safe,” he said.
Around 1,500 students live in the complex. (www.aftenposten.no.)

Government keen on urea, implementation delays

By Muluken Yewondwossen

The government of Ethiopia, in order to facilitate preconditions for the future establishment of a fertilizer factory and also to generate electric power from coal, set up a Coal Phosphate Fertilizer Complex Project Office ten years ago. Kasaye Yeshitila was the chairman of the Office that was under the Ministry of Trade and Industry and located in Yayu Illubabor Zone of the Oromia Regional State. Yayu is 600 km due west from Addis Ababa.
During the decade the office conducted various studies including socioeconomic impacts and geological and feasibility studies for the realization of the industries with Chinese companies such as Ging Sion Explorer and China National Complete Plant Import and Export Corporation (COMPLANT).
In May 2008, Beyene Gebremeskel, general manager of the Public Privatization Enterprises Supervisory Agency (PPESA), stated in a nine month report to parliament that the Yayu project feasibility study has been finalized. He also told Capital that for the realization of a urea fertilizer factory his office has submitted research findings to the relevant officials for final decision.
“We could not say the study of the project has been completed because the project study is based on the environmental impact assessment study of the project,” an expert from the Project Office told Capital.
According to the feasibility study that was undertaken for the last three years by COMPLANT at a cost of 12 million birr, it is estimated that there exist over 100 million tons of coal in the Yayu area and this potential reserve can provide 300,000 tns of Urea, 20,000tns of ethanol and 90Mw of electric power annually. This would cost close to 730 million dollars.
The expert said that before the environmental impact assessment of the project the capacity and cost specifics can not be identified. “The production capacity and cost would be accurately known after the finalization of the environmental impact assessment.”
Sources from the project office stated that even though the Ministry of Finance and Economic Development (MoFED) has allocated a 4.2 million birr budget for the next fiscal year, this sum may be sufficient to start the environmental impact assessment study.
Over the last five years fertilizer prices have shot up to 600 dollars/tn from 160 dollar/tn. Experts who worked in the Ministry of Trade and Industry (MoTI) explain that under current trends fertilizer prices will continue to rise.
Ethiopian farmers started using Urea and Dap fertilizer regularly in the last ten years, increasing foreign exchange expenditures.
“From year to year the demand of fertilizer in the country is increasing,” said an expert from the Ministry of Agriculture and Rural Development. “The government should build a fertilizer factory, because the fertilizer price hike and high demand will adversely affect the country’s agricultural and economical development.”
Experts add that the factory’s construction depends on the conclusion of the environmental impact assessment study but since the government has budgeted only 4.2 million birr for the project office’s various tasks, “It is impossible to finalize the assessment study within the coming two or three years.”
Prior to the completion of the study it will be difficult for the government to get funds and the expert stressed that if the government wants to realize the industry in the near future, the study should be completed as soon as possible.