Regaining the lost edge

Ethiopia’s once vibrant viniculture sector has been revived, thanks in large measure to favorable investment policies as well as the initiative of one of the world’s premier vinters – Groupe Castel. On Saturday May 10th, 2008 the first red merlot grape vine saplings were set into the rich soil of Zeway, where at end of project cycle nearly 500 hectares of vineyards will flourish.
Ethiopia’s wines and liquors had had a lengthy head start in the 20th century and up to the early 1970’s when rampant nationalizations of distilleries and wineries owned mostly by expatriate yet wholly assimilated foreigners, all but doomed viniculture. Currently, Ethiopia is off the map of wine producing African nations as late bloomers – Tunisia, Algeria and South Africa developed robust export oriented viniculture.
The Groupe Castel Winery investment besides giving a much needed shot in the arm for the sector has significance in the fact that it is to produce top quality vintages from a superlative grape variety, adding much needed top end value to Ethiopian exports.
Such wise and farsighted (the first harvest is expected no sooner than three years) investment in a sector that with its proven conducive climatic and soil conditions Ethiopia can corner easily, has been the result of the success of Groupe Castel in Ethiopia by virtue of the exemplary activities of BGI Ethiopia which, with its distinctive and popular brands of consistently high quality beer, is a star performer and a model of corporate success.
At this point while commending (as we should) Groupe Castel, the State Minister of Trade and Industry and the many officials, experts and others who have supported the establishment of the vineyard and winery, we must now also look at the larger economy and identify the obvious pitfalls that worry local and international investors.
Chiefly and most nettlesome is the wretched and worsening season of power rationing. This has, in the most literal sense, darkened business prognosis, making it ever more difficult to meet production targets – thereby raising the real risk of defaulting on loans taken.
Since the nation cannot risk a dominoes effect of bankruptcies destabilizing a still shell shocked financial system even more, it is only right that businesses be somehow compensated for losses being incurred due to the power shortage. While not inferring direct payouts – that would not be sound, it would do a world of good if government, financial institutions and borrowers create a discussion forum to mitigate the situation. And while they are at it the participants may also find solutions to the increasing lack of foreign currency that is stifling trade.
Export oriented industries, are among those that are being negatively impacted and unable to meet usually optimistic export volume targets in a sector that is growing exponentially. This dynamic and infinitely promising activity is in danger of stagnation or worse, as the sector depends heavily on support from local and international financial institutions. Intervention in the form of a mandatory grace period on business loan repayments would not be as some might claim, too much state interference in a free market system. The most capitalist of nations, much averse to big government as they are, did not and will not hesitate to bail out their various market sectors when the warning claxons begin to wail (from Northern Rock to Bear Stearns to Credit Suisse etc...)
With no light at the end of the tunnel, how apt a cliché, and no idea when the power shortfall will no more be a hindrance to a continued economic progress, struggling new investors and others of the business community are keen for some good news.
In the final analysis this unprecedented dearth of power will have taught us a thing or two. In the main, it is that the nation lacks resource forecast mechanisms-even allowing for the unpredictability of Ethiopian rain patterns and the increased demand, to the point where this crippling shortage could not be foreseen.
In Kuwait City – not exactly a poor capital, the state has installed ‘energometers’ at strategic spots, showing the level of real time national power output of the nation’s power plants. While such high-tech displays may not be the most practical solution at our stage of development, in the future, monthly state of the energy situation reports would better prepare the business community and the general public when power shortfalls occur.