Ethiopia and Djibouti sign a memorandum of understanding (MoU) to accelerate the livestock export through the modern and biggest logistics facility, Doraleh Multipurpose Port (DMP) SAS.
The delegation led by Oumer Hussein, Minister of Agriculture, had paid a visit to Djibouti a week ago and during the trip the two parties have agreed to boost the export trade of live animals which is one of the hard currency earners for Ethiopia.
From the questions that Capital inquired through email to DMP, the maritime giant disclosed that the visit of the Ethiopian Minister was part of the signing of the MoU between the Ministry of Agriculture of Djibouti and its counterpart of Ethiopia on the use of the DMP Livestock Terminal.
“Indeed, DMP will serve as a transit station to provide services such as the supply of rest areas to international standards, handling and stowage for the export of live animals,” it explained, adding, “DMP, will work in close collaboration with the National Veterinary Authority (NVA) and will issue the alert in the event of the discovery of serious pathogens.”
As per the operation, the cattle will be sent from Ethiopia from the quarantine center in Mille, Afar region about 530 kilometers east of Addis Ababa.
“The rest period of cattle on the cattle terminal should be between 48 and 72 hours. With this signature, we have taken an important step in this project and intend to finalize it very soon,” the DMP response to Capital elaborated.
DMP has built a state of the art livestock terminal of 27,515 square meters inside the terminal. The livestock Park was inaugurated on January 16, 2021 with an annual capacity of 2.5 million cattle.
Regarding site capacity per day it shall manage 1,000 heads of camel, 500 heads of cattle 4,270 heads of goat or sheep at the current phase that will be expanded in the coming expansion projects.
On July 12th 2022, Djama Ibrahim Darar, General Manager of DMP SAS received within the Port enclosure a Ministerial delegation composed of Oumer, Fikru Regassa, State Minister of Agriculture, Berhanu Tsegaye, Ethiopian Ambassador to Djibouti, Mohamed Ahmed Awaleh, Minister of Agriculture, Water, Fisheries, Livestock and Fishery Resources, accompanied by his Secretary General Ibrahim Elmi for the signing of a memorandum of Understanding.
On his twit Oumer says, “I am delighted in the signing of the MoU with the Ministry of Agriculture of the Republic of Djibouti to operationalize the DMP. The port serves as a resting terminal for export animals originating from Ethiopia. This will boost the staggering live animal export.”
Being located at the main trade route of Asia-Europe -Africa, DMP is positioned as a multimodal platform which will achieve its logistics chain at the regional and international level.
DMP’s activities for fertilizer and grain import to Ethiopia have grown over the year. Regarding fertilizer traffic, it has increased by 50 percent from 2018 to 2021 because DMP benefits with modern infrastructure and equipment’s to accommodate post panamax dry bulk vessels (more than 80 000 MT). DMP is the largest port and main supplier to handle Ethiopian Shipping Lines and all the NPS/NPSB/NPSZNB (types of fertilizer) volume. Also, DMP offers to Ethiopia a wide range of storage silo capacity to store their cargo as well as smooth the free flow operation of their dispatch and direct delivery.
Concerning wheat cargo, DMP has shown an increment of 8 percent from 2018 to 2021 because of the Ethiopian government imports. Besides that, DMP handled the aid cargo import volume with WFP, USAID and other clients and provided them with a wide range of services to facilitate the delivery of cargo to Ethiopia.
Since the opening of DMP Railway Terminal, DMP is connected to Ethiopia not only by road but also by rail. DMP benefits 5 lines of railway to ease the transport flow of fertilizer and wheat, in which the customer can get its cargo on time. This has enabled DMP to enhance its performance productivity and improve the truck delivery process.
Inaugurated in May 2017, the Doraleh Multipurpose Port was designed to relieve congestion at the former historical port of Djibouti.
The DMP accommodates vessels with up to 100,000 DWT and boasts some of the most modern facilities in Africa.
The facility that consumed USD 590 million in investment cost has a range of terminals that include bulk, break, container and RoRo, and it has 1,200 meters of quay line, accommodating 6 berths with a depth of 15.3 meters.
Ethiopia, Djibouti ink agreements to propel livestock export
Ethiopia’s coffee beats odds at export market
Africa’s coffee export registers reduction as of May while on the flipside Ethiopia’s export gained about a fifth increment in comparison to a similar period of 2021. Globally, coffee prices have shown a 4.5 percent gain in June.
The International Coffee Organization (ICO), an intergovernmental organization for the bean, through its monthly coffee market report indicated that some enhancement has been recorded in the June trading as compared to the preceding month which registered the lowest rate in the coffee year that started in October.
The monthly report stated that the ICO Composite Indicator Price (I-CIP) gained 4.5 percent from May to June 2022, averaging 202.46 US cents/lb (lb/ pound is roughly 0.45 kg) for the latter.
The I-CIP had lost 2.4 percent from April to May 2022, averaging 193.71 US cents/lb for the latter and average prices for all groups indicators decreased in May 2022.
In June 2022, the I-CIP fluctuated between 197.37 and 206.40 US cents/lb.
On its review, the market report added that the average prices for all groups indicators increased in June 2022, “the arbitrage between New York and London Futures markets developed an 8.5% increase, ranging from 124.30 to 134.90 US cents/lb from May to June 2022.”
It said that global exports of green beans in May 2022 totaled 9.75 million 60-kg bags, compared with 8.8 million bags in the same month of the previous year, up 10.7 percent.
Total exports of all forms of coffee were up 10 percent in May 2022, totaling 10.8 million bags, while in the first eight months of coffee year 2021/22 they reached 87.99 million bags, with a consolidated increase of 0.7 percent.
The report that has also classification on exporting areas and countries indicated that exports from Africa decreased by 0.9 percent to 1.29 million bags in May 2022 from 1.3 million bags in May 2021.
“For the first eight months of the current coffee year, exports totaled 8.65 million bags versus 8.82 million bags in coffee year 2020/21,” it said adding, “Uganda’s exports have continued to fall, decreasing by 7.9 percent in May 2022 and 4 percent in October 2021–May 2022, as compared with the same period a year ago.”
Lower production stemming from droughts in some areas of the country’s coffee-growing regions also continues to explain the fall in Uganda’s exports of coffee.
Tanzania’s exports are also down 3.6 percent in the first eight months of coffee year 2021/22 at 0.78 million bags as compared with 0.8 million bags in the same period last year, “meanwhile, exports from Ethiopia increased to 2.28 million bags in the same period, representing a rise of 18.9 percent from 1.91 million bags.”
For the ended budget year Ethiopia exported 300,000 metric tons of coffee which is the highest volume ever in the sector trading history.
The reporter added that world coffee consumption was still projected to grow by 3.3 percent to 170.3 million 60-kg bags in 2021/22 as compared to 164.9 million for coffee year 2020/21. In 2021/22, consumption is expected to exceed production by 3.1 million bags.
Global exports of green beans in May 2022 totaled 9.75 million bags, compared with 8.8 million bags in the same month of the previous year, up 10.7 percent. Three of the four groups also increased their exports in May 2022. Despite the double-digit increase in May, for the first eight months of coffee year 2021/22, exports of green beans totaled 79.24 million bags, up only 0.2% versus 79.09 million bags for the same period in coffee year 2020/21.
Kacha steps foot independently in the digital finance space
New mobile money service provider, Kacha Digital Financial Services S.C has been licensed to be a private mobile money platform and now joins the financial industry despite it not being owned by a financial institution.
Earlier this week Kacha received its license from the National Bank of Ethiopia to join the market.
Founded by 13 Ethiopian techies and entrepreneurs, Kacha was registered with a subscribed capital of 200,000 million birr based on the payment service proclamation 718/2011 and the NBE directive ONPS/01/2020.
“The issuance of this license distinctly marks the beginning of a new era for broader participation of the private sector in the national digital financial services landscape as much as it does as a defining milestone to the team of founding shareholders and professionals involved in its establishment for the past three and half years,” Kacha underlined.
According to the company, Kacha has already brought on board more than 30,000 agents across the country which is said to reach over 85,000 within six months.
Aimed to provide cashless transaction, the firm intends to unlock possibilities for users by providing access to affordable, convenient, and secure digital financial services that drive sustainable growth, enhance access to finance, and improve citizens’ livelihood.
The services Kacha provides is said to include; the opening of wallet accounts, cash-in, cash-out, micro saving, uncollateralized micro credits, micro insurance, direct payments, bill payments, international remittance, fund transfer, airtime top-up, card payments, and other innovative services, which will ultimately boost financial inclusion and help the country to attain its aspirations of meeting national development goals including the SDGs.
“Kacha’s vision is closing the existing gaps to change the face of digital financial services in Ethiopia through availing innovative, affordable, seamless, and value-adding business propositions including bringing financial inclusion, Empowering citizens” said Yigermal Meshesha, marketing and business development manager at Kacha.
Kacha Digital Financial Services S.C is composed to play a key role in driving the journey towards the empowerment of citizens by bringing meaningful financial inclusion through innovative product and market approach designs after dedicating years of development and institutional preparation led by Ethiopian developers along with international experts.
The National Bank of Ethiopia has also approved the appointment of 7 Board of Directors and the appointment of Abreham Tilahun Abera, as the founding Chief Executive Officer of Kacha Digital Financial Service. Abreham had been serving Lion International Bank for more than 2 years as the acting vice president and has an ocean of experience in vast banking operations which spans 16 years.
The development of the mobile money ecosystem in Ethiopia can generally be defined as early stage. The mobile money ecosystem in Ethiopia follows a bank-led model whereby banks and microfinance institutions (MFIs) partner with a technology provider to offer the service as the sector has been closed for both local and foreign fintech firms. Until recently, fintechs were barred from providing digital financial services (DFS) on their own and had to partner with financial institutions as system suppliers, constraining their growth.
This ban ended in 2020 with the introduction of two laws that opened up the sector. This meant fintechs could now operate independently and many startups were quick to try and take up the opportunity.
Over a year ago, EthioTelecom’s mobile money platform telebirr became the first fintech platform in Ethiopia that’s was not owned by a financial institution. Telebirr has now over 21 million subscribers.
Trade ministry targets ‘$5.4 billion’ from export
The Ministry of Trade and Regional Integration (MoTRI) plans to generate 5.4 billion dollars from export for the 2022/23 trading year.
MoTRI emphasizes that structural economic transaction requires time as the agriculture sector takes lead, whilst the industry sector lags behind.
In a press conference held on Wednesday, MoTRI disclosed the country had earned 4.12 billion dollars in export revenues during the just concluded Ethiopian 2021/2022 fiscal year, which ended on July 7.
The Ministry pointed out that the agriculture sector had generated 72 per cent of the projected plan.
“The agriculture sector still has the economic lead, generating the highest incomes, and it will take a lot of work to achieve the structural economic transition,” said Kassahun Gofe, State Minister of MoTRI.
As the minister indicated, though efforts to improve the diversification of Ethiopia’s export products are taking shape for the structural transaction, it is not easily achievable in a short period of time, thus the agricultural sector will continue to take lead in export earnings.
The agriculture sector marked 105 percent of its overall plan, while the industrial sector generated 12 percent of revenues for its 80 per cent wholesale plan, whilst the 53 percent overall cost-of-business plan for the sector generated revenues of 14 percent.
“The Industry sector is not taking the grip on shares as expected and the country out to double its efforts to transition from Agri led to Industry led,” said Kassahun, adding, “This is atop of our plans to improve for the coming year.”
“This revenue generated showed a growth of 13.81 percent from the last budget year and gave much meaning to the country when it jumped out of revenue,” the State Minister explained highlighting that the growth in interest-trading revenues would improve the country’s ability to embrace, fly and restore credit.
The figure has shown 500 million dollars revenue jump from 2020/21 which was only 3.62 billion dollars. However, MoTRI disclosed the 2021/22 fiscal year export revenue fell slightly short of the government export revenue target which was 4.63 billion USD. In terms of the commodity composition of exports, although coffee continues to dominate the top spot, also other five major non-coffee exports, oilseeds, gold, chat, flower, and pulses each reeled in more than 100 million dollars per year.
According to the Ministry of Industry (MoI), the industry sector had generated about 500 million U.S. dollars in export revenue from the manufacturing industry sector in the 2021/2022 fiscal year. The revenue marked a 100 million U.S. dollars increase as compared with the previous Ethiopian 2020/21 fiscal year.
The lack of side-links, illegal smuggling trade and the slow pace of structural economic transition are some of the problems that are indicated by the state minister as hurdles facing the export business.
“Export is the cornerstone to realize the 2025 plan of the country to join middle income countries. To this end agriculture, manufacturing and mining sector pays significant role for the overall export progress of the country. Even though the export performance of the country showed increments from time to time the result doesn’t meet the desired goals,” the trade ministry underlined.
Ethiopia gives due emphasis to the agriculture, mining and manufacturing sectors such as textile and garment, leather and pharmaceuticals exports as sources of substantial foreign currency. The country’s export performance shows improvement but still much effort remains to boost the export performance of the country in all sectors.
