The United Nations conference on trade and development calls on the poorest countries to take a leading role in directing external loans and aid for their development. Developing Countries should take ownership of their development agenda and manage the allocation of external development finance in alignment with their national development priorities.
LDC criteria are reviewed every three years by the Committee for Development Policy (CDP) group of independent experts that reports to the UN Economic and Social Council. According to their per capital income, human asset and economic vulnerability, Currently 47 countries have been designed as least developed countries of the world, 32 from Africa’s, eight Asians and seven from Oceania countries.
As the report shows LDCs account for around 20 of the most aid-dependent countries due to persistent shortfalls in their domestic savings and per capita income. Except those who are oil-exporting countries, 50 percent of these countries have zero account capacity to general surplus and they are dependent on external resources for capital accumulation. As World Bank and international monetary fund debt sustainability framework In May 2019, five countries were in debt distress, 13 in high risk of debt, 17 moderate risks and nine were in low risk of debt. The report indicates that Ethiopia is at high risk of paying back its debt with zero account capacity. The country expansion of trade flows has largely failed to support the nation and commodity dependency. The resource gap remained about 15 percent of its GDP. In the latest report shows Ethiopia has 52 billion debts which are 26 billion of it is the external debt which covers 33percent of the GDP. Targeted aid less than 10 percent of it has reached the targeted area.
From the overall 23 percent of the gross disbursements of Ethiopia official development assistance flows in 2015- 2017 weight of aid for trade subcomponents Agriculture, forestry and fishing take the largest part followed by transport and tourism 6 percent, energy 4 percent, industry mining and construction 1.5 percent, business, and other services and trade policy and regulations 1 percent, banking, and finance 0.7 percent, communications 0.1 percent
Developing countries lose 100billion USD annually due to aggressive tax avoidance through the use of tax havens, tax envision and illicit finance flows are some obstacles to achieve sustainable and equitable growth. Reducing the illicit finance and arms flows, strengthening the recovery and export capacity, domestic and public resource mobilization, returns of stolen assets and combat all form of organized crimes is needed to strength there capacity. Developing countries should create a way to participate in private sectors on with national development priorities and the international community should revamp international development partnership and build up to aid management system. Aid flows relatively to economic variability’s has been on a steady decline since 2003.
Countries will typically need to qualify thresholds under at least two of the three criteria if the three year average per capital gross national income of the least developed countries has risen to the level of at least double and the performance is considered as sustainable the country will be eligible for the graduation from the list. Ethiopia has been listed as least developed countries for the last 40 years. And the government has planned to get out of the list until 2025 as middle-income countries.
LCDs have increased their debt more than doubling their external debt stock from 146 billion USD to 313 billion USD between 2007 and 2017.
UNCTAD 2019 Least Developed Countries
Workshop advances food fortification
A seminar has been held on advancing food security and food fortification of Ethiopia at BASF. The workshop connects stakeholders from the food value chain and enhances cooperation to address challenges in the food value chain.
The key to ensuring food security in Ethiopia lays in public-private partnerships. A high prevalence of micronutrient deficiencies is a major problem for the nation. The Government of Ethiopia has been working hard to improve food security and food fortification by understanding these prevailing nutrition problems and their consequences, as well as the manifold benefits of addressing these issues.
“We are working with the stack holders starting from the production process storage and transportation of food improvement needed to ensure food safety and quality during processes and to ensure minimum waste.” Andreas Bluethner, director of food fortification and partnership at BASF
The UN estimated that the world population will increase and will have an environmental impact and also affects social issues.
BASF is working on Three major areas “resource, environment and climate,” “food and nutrition “and “quality of life” to provide sustainable solutions for food security and fortification.
“The government, private sectors and international organizations should collaborate to generate multifaceted solutions to ensure sustainable food security” said Gift Mbaya, BASF general manager and business lead for BASF TRO Ethiopia. “Innovation will impact how world will feed the growth of population, decreasing the natural resources, soil degradations and climate change
Ethiopia has set its first National Food and Nutrition Policy in 2018 to fulfill the nation’s ambition to end malnutrition and stunting by 2030, the policy, prepared on the basis of the national nutrition strategy, and programs that have been under implementation since 2008.
Solomon Tadele, Director of Food, Medicine and Health Care says, “this kind of session on food fortification helps to make different analysis on products and their nutrients to fulfill the gap of a fortification based on our context.”
The German chemical company and the largest chemical producer in the world, BASF Group runs six major business segments. This division includes chemicals, performance products, functional materials & solutions, agricultural solutions, nutrition, and oil & gas. Positioned across 80 countries with its subsidiaries and joint ventures, it has 390 production sites in Europe, Asia, Australia, the US, and Africa.
Beside its plant on seed agricultural on Arerti, business solutions concentrated around biological and chemical crops, soil and pest protection, BASF has been working on Capacity building, training, coaching with the government and private sectors on food fortification and nutrition in Ethiopia.
Donkeys face population collapse due to skin trade
- Donkey Sanctuary warned half world’s donkey population could be wiped out
- Charity explained five million donkey skins are used every year to make ejiao
- This is a gel believed to cure anything from colds to ageing in Chinese medicine
Donkeys are in a state of global crisis with the animals facing population collapse across a number of countries as traders target their skins to export as an ingredient for ejiao, a traditional Chinese medicine, international animal welfare charity The Donkey Sanctuary revealed.
The charity’s latest report into the trade, Under the Skin Update, has found that local donkey populations have crashed in a number of countries as increasing demand for ejiao has led to an unsustainable number of donkeys being slaughtered.
Gelatine in donkey hides is a key ingredient in ejiao and The Donkey Sanctuary is now calling for an urgent halt to the largely unregulated global trade in donkey skins before donkeys are virtually wiped out in some areas.
The supply of donkey skins cannot meet demand in China, which needs around 4.8 million hides per-year for ejiao production, so traders, mainly in Africa, Asia and South America, are exporting additional skins to China.
Donkey populations in China have collapsed by 76 percent since 1992. Since 2007 donkey populations have declined by 28 percent in Brazil, by 37 percent in Botswana and by 53 percent in Kyrgyzstan.
In Kenya and Ghana, both countries where the skin trade operates, donkeys are also being exploited by traders with fears that their numbers could be devastated in the near future.
With just under five million skins needed every year for ejiao production, the industry would need more than half the world’s donkeys over the next five years to meet demand.
The collapse of the donkey population will have a hugely damaging impact on the livelihoods of an estimated 500 million people in some of the world’s poorest communities that the animals support.
Donkeys transport goods to market, carry water and wood, provide access to education and are a vital source of income for vulnerable communities, particularly women.
The report reveals appalling animal welfare abuses and biosecurity risks at every stage of the skin trade both in its legal and illegal forms.
Tens of thousands of donkeys, many of whom are stolen, are rounded up to endure long journeys to slaughterhouses on crowded trucks without access to food, water or rest with an estimated 20 percent of animals dying en route.
Demand for skins is so high that even pregnant mares and young foals as well as sick and injured donkeys are indiscriminately caught and transported, contrary to international animal welfare guidelines.
The report revealed that many skin trade donkey handlers have little or no training in animal handling, often resorting to cruel and illegal methods of controlling donkeys such as kicking, dragging and the use of spiked sticks called goads.
Conditions in many of the donkey slaughterhouses are appalling. The Naivasha slaughterhouse in Kenya was immediately closed after witnesses recorded footage of dead and dying donkeys some with open, maggot-infested wounds. Aborted foetuses were also seen as well as skinned carcasses dumped next to live donkeys awaiting slaughter. The slaughterhouse has since reopened.
In Bahia, Brazil, 800 donkeys were found starving to death in holding pens alongside hundreds of rotting carcasses which had polluted their only water source.
Donkeys are often brutally slaughtered in front of other animals. Footage obtained by The Donkey Sanctuary from a slaughterhouse in Tanzania revealed animals being repeatedly hit with hammers in failed attempts to stun them.
The Donkey Sanctuary has also discovered links between the skin trade and wildlife crime, with some traders offering donkey skins for sale on online platforms that are also selling illegal wildlife products including ivory, pangolin scales and rhinoceros horn. In one instance, tiger skins were found hidden underneath donkey skins.
Unhygienic practices during transport, in slaughterhouses and when the hides are processed onwards have resulted in an increased risk of the spread of dangerous diseases such as anthrax and equine diseases, equine flu and strangles.
More than 60,000 donkeys died in West Africa this year along live skin trade routes, which the World Organisation for Animal Health have said are almost certainly linked to the trade.
These deaths demonstrate the potentially high risk of contagious diseases being spread as a result of the skin trade. Donkey skins from this area are being exported untreated direct to China.
Mike Baker, Chief Executive of The Donkey Sanctuary, said: “This is suffering on an enormous and unacceptable scale. This suffering is not just confined to donkeys as it also threatens the livelihood of millions of people.
“The skin trade is the biggest threat to donkey welfare we have ever seen. Urgent action needs to be taken.”
Stephen Njoroge from Kiserian, near Nairobi, Kenya, is totally dependent on his donkeys for his livelihood. He said: “I used my donkeys for general transport, collecting water, taking vegetables to market and carrying construction materials.
“My donkeys were very close together and were stolen in the same night, and I am still recovering from the loss. I have heard much about the donkey slaughterhouses and they are causing the donkey thefts in this area – they should be closed down straight away; it is the only way to stop the thefts.”
The Donkey Sanctuary is calling for the ejiao industry to cut links with the global skin trade and move towards more sustainable sources of raw materials provided by cellular agriculture such as the use of artificially grown donkey-derived collagen.
The charity is also recommending that the Chinese Government suspends the import of donkeys and their products until both can be proven to be disease free, humane, sustainable and safe and for national governments to take immediate steps to stop the trade.
Ethiopia is home to an estimated 8.5 million donkeys – thought to be the largest number in any one country. Current research from the University of Bristol in the UK shows that owning a donkey in Ethiopia can mean the difference between poverty and survival for some of the poorest communities in the country.
Ethiopian banks can come to Somaliland
The Financial and Investment Act has been finalized to open up a space for foreign financial institutions and investors to operate in the de facto state of Somaliland hoping that Ethiopian institutions and business will enter the country.
The Governor of the Somaliland Central Bank disclosed to a group of journalists in Hargeisa that the new law was tabled at the parliament and is expected to be ratified in early January 2020.
The new rule allows foreign financial institutions to operate either in conventional or interest free banking schemes which was prohibited previously. Service was limited to only three banks: Dahabshil International Bank, Daresalam Bank and Premium Bank.
“The opening of space to foreign banks will formalize and facilitate trade and investment in Somaliland in addition to providing financial access for potential investors in the country,” said Ahmed Hassen Arwe, Director General of Somaliland Central Bank.
The Governor hopes the 19 plus Ethiopian private banks including the state-owned Commercial Bank of Ethiopia will be the first to arrive as some are already operating in the border town of Togochale.
The Governor also confirmed that representatives from the Commercial Bank of Ethiopia were in Hargeisa to speak with the officials adding that CBE is interested in opening branches very soon.
According to the Governor, because of security concerns and criminal activity along the border of Togochale, the Central Bank of Somaliland plans to open a branch. The effort to have a branch in Hargeisa began in 2016.
Two weeks ago, Bach Gina, President of CBE disclosed the plan to open branches in Somaliland adding its, presence in neighboring countries to three, including Djibouti and South Sudan.
So far none of Ethiopian business operating in Somaliland have registered formally, though there are business in Hargeisa including some private higher education institutions working in the country for over a decade and contributing to human power development strategies for the country.
Ethiopian investment in Somaliland includes meat and dairy products, fruits and vegetables including Khat (a simulant leaf) which predominantly controls the market in Somaliland.
If a person wants to invest in Somaliland there are no restrictions on doing business, they simply must visit the investment office before going to the appropriate ministry. The Governor said they have worked to make getting a business set up more efficient.
The National Bank Act is expected to help Somaliland because right now banks can only provide interest free loans but the new banks will be able to provide traditional interest bearing loans.
Previous regulations made it more difficult for foreign capital and international loans and the economy is based on the remittance from the estimated over a million Somalilanders residing in Europe and the United States.
Somaliland investment is completely owned by the people, no one relies on loans.
According to the figure from the Central Bank outlet over 1.6 billion USD was earned through remittances last fiscal year, a figure which is on the upswing. Most financial flow is made electronically. There is also mechanism to transact in Somaliland shillings for less than 100 USD in a bid to reduce the cost of living for many Somalilanders.
The government is trying to reduce inflation. It was able to reduce the rate of the Shilling to USD to 8,000 from 10,000.
The Governor urges Ethiopians to come and invest in Somaliland as the 10percent lower tax rates and tax holiday pave tremendous opportunities for them adding that the long coastal Red Sea offers ample fishery resources.
Somaliland is working to amend and enact new laws to facilitate trade and investment. They want to attract Ethiopians, hoping that the economic dynamics will change in 2020.
Somaliland follows the free-market economy. Right now, the law allows transactions via Islamic banks only when it comes to loans whereas it is allowed in Islamic banking or other banking service subject to a service charge.
Though the numbers are insignificant, Syrian investors are doing business in Hargeisa.
In the de facto state of Somaliland saving is law, there is no share market, they don’t have well developed company laws, in turn the investment is at its infancy stage but on the flip side there are ample investment opportunities once the laws are enacted.
The National Bank Act, Investment Act and Taxation Act are expected to boost the Somaliland Economy as the country attempting serious reforms.