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Djibouti Ports corridor road urges caution ahead of anticipated weather challenges in Horn of Africa

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Transporters are advised to exercise caution in the upcoming months due to anticipated weather conditions in the Horn of Africa, as forecasted by the Djibouti Ports Corridor Road (DPCR).

The Djiboutian highway management enterprise referred to the IGAD weather prediction, which anticipates above-average rainfall in Djibouti, the major port outlet for Ethiopian cargos, from June to September.

According to DPCR, established in 2017 to design, develop, maintain, and finance highways linking Djibouti ports to neighboring nations, road users should exercise extreme caution. They advised people to “stay up to date on the latest forecasts, avoid flooded areas, and equip their vehicles for wet weather.”

Climate change has caused Djibouti to experience unexpected and uncommon weather conditions in recent years, interfering with truck operations and impacting the road network.

DPCR is jointly owned by Djibouti Ports and Free Zones Authority and the Djibouti Road Agency.

The IGAD Climate Prediction and Applications Centre (ICPAC) issued the June to September 2024 seasonal forecast, indicating an increased likelihood of above-normal rainfall over most parts of the Greater Horn of Africa (GHA).

On May 21, IGAD stated that areas expected to experience these above-normal conditions include Djibouti, Eritrea, central and northern Ethiopia, western and coastal Kenya, much of Uganda, South Sudan, and Sudan.

Conversely, parts of northern Somalia, isolated areas over western Ethiopia, and northwestern South Sudan are expected to experience drier-than-normal conditions.

“The climate patterns in the JJAS (rainfall conditions for June to September) 2024 period closely resemble those of 1998 and 2010, both of which experienced wetter-than-normal conditions over much of the region,” it added.

As per the forecast, an early to normal onset is expected in several parts of the region, including central and northern Ethiopia, Eritrea, Sudan, and South Sudan. However, a delayed onset is likely in Djibouti, parts of eastern and western Ethiopia, central and western Sudan, and southern South Sudan.

The temperature forecast shows a probability of warmer-than-normal conditions across the region, particularly over northern Sudan, central and western Ethiopia, Somalia, Kenya, Rwanda, Burundi, and Tanzania.

Guleid Artan, ICPAC’s Director, noted that “The Greater Horn of Africa (GHA) stands as a region that is highly susceptible to the adverse impacts of climate change, which pose significant challenges to the resilience of our communities. The forecasted wetter-than-normal conditions for June to September 2024 echo the patterns of 1998 and 2010, highlighting the level of impact especially for South Sudan and Sudan, which may experience impacts of floods.”

In line with the World Meteorological Organization’s guidelines and recommendations, ICPAC has adopted an objective seasonal forecast method to generate climate forecasts for the Greater Horn of Africa.

May 2024 initialized seasonal forecasts from 9 Global Producing Centres (GPCs) were utilized and processed to develop the June – September 2024 seasonal climate outlook.

In a related development, DPCR and Salaam African Bank have entered into a loan agreement to finance the rehabilitation project of the Doudoubalala-Dikhil section of National Road 1. This collaboration marks a crucial step for the road and financial sector of Djibouti.

This audacious project aims to renovate a crucial section of Djiboutian road infrastructure, with the major objective of improving regional connectivity and local socio-economic development.

This is the first time that a local Djiboutian bank has committed to financing a road project of such scale, marking a crucial step in the economic and financial development of the country.

Africa’s Business Leaders convene in Kigali for landmark Africa CEO Forum

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Kigali, Rwanda

The prestigious Africa CEO Forum 2024 concluded last week in Kigali, Rwanda, drawing over 2,000 of Africa’s top business leaders, 5 heads of state, investors, and media from across the continent and globe. The event, a collaboration between Jeune Afrique Media Group and the International Finance Corporation (IFC), served as a significant platform for discussing the key economic and business trends shaping the African continent.

A highlight of the forum was a dedicated session exploring Rwanda’s investment opportunities, showcasing the country’s strategic initiatives and favorable business environment. “A solid governance system and strong support for private sector investments have made Rwanda a role model for leadership and strategic investments,” said Amir Ben Yahmed, CEO of Jeune Afrique Media Group.

The forum addressed critical issues facing African economies, including high unemployment, insecurity, low internet connectivity, foreign exchange crises, and cross-border payment frictions. CEOs stressed the need for greater collaboration between the public and private sectors to develop home-grown solutions and remove barriers to talent mobility and policy harmonization across the continent.

Rwanda’s President Paul Kagame emphasized that the willingness to execute is even more important than having solutions. “Anything that can be done in any part of the world can be done in Africa. Why can’t we start doing it already?” Kagame challenged.

The event also highlighted the significant opportunity presented by Africa’s growing population, which is expected to account for 25% of the world’s population by 2050. However, only a few countries are effectively harnessing this demographic dividend to transform their economies.

The conference featured insights from experts at Boston Consulting Group on the five key forces shaping the world today: geopolitics, generative artificial intelligence, the green revolution, global debt, and Generation Alpha. The latter, comprising those born after 2010, will make up 50% of Africa’s population in the next five years, presenting a substantial labor pool for the continent.

One of the standout moments was a call from Aigboje Aig-Imoukhuede, chairman of Access Holdings, for African countries to be proactive in setting their own agendas and inviting the world to join, rather than merely waiting to be invited to the table.

In a testament to its pivotal role in Africa’s infrastructure and industrial development, the Africa Finance Corporation (AFC) was awarded the prestigious Panafrican Champion Award at the forum. This recognition underscores AFC’s commitment to driving transformative projects, such as Djibouti’s first wind farm and the Lobito Corridor rail project, that are advancing the continent’s economic integration and prosperity.

The Africa CEO Forum 2024 concluded with a renewed sense of optimism and a call to action for African leaders and businesses to take charge of their economic destiny, embrace innovation, and collaborate to unlock the continent’s tremendous potential.

Veteran journalist Amare Aregawi honored for four decades of service

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Amare Aregawi, a seasoned journalist who founded and served as the general manager of the Media and Communications Center, has been honored for his distinguished career spanning four decades.

Aregawi, the founder of The Reporter publications, was awarded a lifetime achievement award by the Kibir Award, which recognizes writers and journalists in various categories.

“Amare Aregawi is an iconic figure in the Ethiopian media landscape,” said the Kibir Award organizers. “His unwavering dedication to journalism and his commitment to shaping the discourse in the country over the past four decades are truly commendable.”

Amare, an Ethiopian journalist, founded the Media & Communications Center, which publishes The Reporter, a prominent Amharic and English newspaper headquartered in Addis Ababa. He also serves as the editor-in-chief of the bilingual newspaper and co-owns the TV network ARTS TV.

Prior to his current roles, Amare was in charge of Ethiopia’s public television network, EBC (formerly ETV), following the fall of the Derg dictatorship in 1991.

Amare’s illustrious career has not been without its challenges. In 2008, he was arrested in connection with an article about labor practices that criticized Dashen Brewery, a local beer brand. The brewery filed a defamation suit against the newspaper, leading to Aregawi’s arrest on August 22, 2008. He was released on bail shortly thereafter.

Shortly after his arrest, and following a series of editorials criticizing the business community, Amare was assaulted and left unconscious following a parent-teacher meeting at his son’s school. The International Press Institute connected the attack to his reporting and called on the government to “do everything in their power to ensure that Ethiopian journalists are free to carry out their profession without fear of attack.”

Despite the obstacles he has faced, Amare has remained a steadfast champion of independent journalism and has continued to shape the media landscape in Ethiopia. His lifetime achievement award is a testament to his unwavering commitment to the profession and his significant contributions to the country’s media industry.

MoF dispenses 73% of budget allocation to public offices

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The Ministry of Finance (MoF) committed 73 percent of the 426 billion birr that it intended to distribute for public offices at the central government in the first nine months of the 2023/24 budget year. The government’s temporary debt payment suspension, which it obtained from the official creditors committee, helped to reduce the load on the budget for the year.

According to the income and cash flow management, the total amount disbursed to central government offices in the last nine months has been 309 billion, which is 117 billion birr short of the target, according to Minister of MoF Ahmed Shide.

During his presence on May 22, the Minister informed the Plan, Budget, and Finance Affairs Standing Committee, “We are not transferring as per the budget allocation due to it being held based on the revenue and cash flow management.”

The committee members stated that governmental offices would not be able to carry out their tasks since insufficient funds were allocated.

In response, Ahmed stated that “the disbursement is also considered project performances” and that “the direct advance (DA) has been minimized.” He guaranteed that all funds allocated for public offices will flow in the remaining three months of the budget year.

For the fiscal year 2023/24, the central government received 573.5 billion birr out of the 802 billion birr approved budget.

MoF was targeted to provide 157.9 billion birr in block grants to regions and for projects under the Sustainable Development Goals in the first three quarters of the budget year; however, the actual amount disbursed was 163.1 billion birr, or 103.5 percent of the target.

The Minister said, “The disbursement shows increments due to some of the regions taking their budget allocation for the year in advance.”

According to the report, 331 billion birr in income were obtained from the Ministry of Revenue over the specified time, and 470 billion birr have been disbursed overall, while Treasury bills (T-bills), Treasury bonds, and DA are the primary means of covering the 139 billion birr deficit.

While the generation was 331 billion birr, the government is expected to generate 356.5 billion birr from taxes and duty in the first nine months of the budget year.

For the specified time, the actual performance was about 93 percent of the target, and for the year, it was 68 percent of the target.

According to Ahmed, over the nine months of the budget year, 111 billion birr was meant to be paid off, but only 65 billion birr were actually paid for both local and overseas creditors.

He stated that the suspension of payments from bilateral creditors through the official creditors committee is one of the main causes for the service reduction.

The government has an interim debt repayment suspension of USD 1.44 billion that was scheduled to be paid in the current and upcoming budget year.

“Negotiation is underway to get an additional USD 0.49 billion debt suspension from bilateral creditors,” Ahmed said.

While state-owned enterprises (SOEs) were expected to pay USD 512.3 million for external lenders within the specified time, the actual service settled was USD 52.9 million, or about 10 percent of the total. Since it is a component of the temporary debt suspension granted by the bilateral creditors, it is decreased.

“The debt suspension has made a substantial contribution to relieving the burden of the budget deficit,” stated Ahmed.

The budget deficit is being covered by an increase in domestic debt.

The MoF paid out 470 billion birr for public offices in the first nine months of the budget year; the remaining 139.2 billion birr represented a deficit, which was primarily compensated by domestic sources.

The government has raised 88.7 billion birr in the first nine months of the budget year through T-bills and Treasury bonds. The latter was introduced in November 2022 and requires commercial banks to purchase bonds at a rate of 20 percent of each new loan disbursement.

Banks have bought 27.3 billion birr worth of Treasury bonds with a five-year maturity during the budget year mentioned.

Ahmed stated that the MoF obtained 57 billion birr DA from the National Bank of Ethiopia during the budgetary year, compared to 147 billion birr the previous year.

The Board of Directors of NBE has resolved to restrict such lending to a maximum of one-third of the previous year’s levels at the start of the budget year. The real sum, though, is a little bit more than the goal.

In the nine months of the budget year, the entire public sector debt, including domestic debt, was valued at USD 65.7 billion.

Ahmed stated that the ratio of total debt to GDP is 40.2 percent, “which is within a tolerable range when compared with other countries with similar economies; the country should improve the debt service to export ratio, which is the major challenge.”

The sum of the external debt, which is USD 28.4 billion, or 17.4 percent of GDP, includes USD 8.4 billion owed by SOEs.

Ahmed claims that the central government owes USD 20 billion in total external debt, which somewhat increased as a result of the World Bank’s concessional loan issuance.

He stated his optimism that the nation’s debt load would be moderate in the next years if the government and the G20 member nations established an agreement through the Common Framework.

Ethiopia is undergoing negotiations for a debt re-profiling under the Common Framework with the official creditors committee, however, these negotiations are taking a very long time to finish.