The African Continental Free Trade Agreement (AfCFTA) entered into force on May 30.
The AfCFTA, which was signed by 44 African countries when it was launched in Kigali, Rwanda, in March 2018, aspires to create a tariff-free continent that can grow local businesses, boost intra-African trade, spur industrialization and create more jobs.
The pact has been ratified by 22 members of the African Union (AU), which is the threshold needed for the deal to come into force.
The agreement will progressively eliminate tariffs on intra-African trade, making it easier for African businesses to trade within the continent and cater to and benefit from the growing African market, said the AU.
The decision to form a continental free trade area in Africa was adopted in January 2012 during the 18th Ordinary Session of the Assembly of Heads of State and Government of the AU while AfCFTA negotiations were officially launched by the AU in 2015.
The first negotiation forum was held in February 2016 and seven more were held until the agreement was signed in March 2018.
Trade officials from the continent will meet again in the first week of June 2019 to finalize work on supporting instruments to facilitate the launch of the operational phase of the AfCFTA during Extra-Ordinary Heads of State and Government Summit, said the AU in a statement.
If all the 55 AU members join it, the AfCFTA will become the world’s largest free trade zone by the number of countries, covering more than 1.2 billion people, with a combined gross domestic product (GDP) of 2.5 trillion dollars.
After its implementation, the African free trade accord is also projected to boost intra-Africa trade by more than 52 percent by the year 2020, according to the United Nations Economic Commission for Africa.
African Continental Free Trade Agreement goes into effect
Homebuyers swindled by Diaspora firm
The Italian-Ethiopian real-estate company O-LOGO PLC has failed to get homes to buyers some of whom have waited 17 years.
According to the buyers, who bought the he homes that are located in Kassanches, behind the compound of the United Nations Economic Commission for Africa (UNECA), the apartment lacks basic infrastructure and finishing work. However, the buyers have paid the complete price of the home to O-LOGO.
According to the homebuyers, the owner of O-LOGO has also gave the title deed of the apartment building as collateral.
The buyers are now successfully blocked a foreclosure made by NIB Insurance after O–LOGO failed to fulfill an agreement made with NIB.
The buyers said that the company promised to deliver the houses in one year and six months but that never occurred.
One of the buyers who asked for anonymity said “We love our country so we invested our money in the houses to live and work here and serve our country but the company has stolen our money and is blocking our vision to come here and live in the homes we paid for.”
“We fear the owner of the company may leave the country one day and sell the houses to another party but we have invested our money and we plead for assistance,” the owners pledged.
Some 16 home buyers are also preparing a lawsuit against the company and its owner, Leonardo Sibona and are asking for the government’s help.
Leonardo Sibona is an Italian – Ethiopian man who established the company in 2003.
Noah’s unique approach to home construction pays off
The dominant and extraordinary property developer Noah Real Estate is expanding its domination of the sector by acquiring even more real estate properties under its scheme. The latest deal features Ambassador Real Estate that has transferred its property to Noah.
Noah also inaugurated 200 residential apartments at a site called Noah Garden Residential Apartment around commonly known as Gurd Shola in east Addis Ababa.
The real estate developer have also secured and started swift development on the property of Ambassador Real Estate.
A source close to the company told Capital that Noah, one of the most reliable real estate developers, has secured an over 30,000 square meter plot of the Ambassador Real Estate to accelerate its business.
“The plot is located around Ayat north east of Addis and we have already started using 16 blocks to build a G+5 structure on the site,” a source at the company said. The source added that the structure work is completed in 3 months and now the project is transforming to the next level.
Noah has implemented a similar approach in the past. They have also managed other company’s real estate sites and defused some of the disputes between those companies and home buyers.
Ethiopia’s real estate industry is known for untrustworthiness, because most of the developers have delayed projects for much longer than the agreed period in contracts or projects have been completely undone and buyers have never gotten their homes.
The seven- year-old Noah Real Estate is different because they build the homes before they are sold. This allows them to get homes transferred to buyers consistently and on time.
Even though they are late to join the game than other developers they have transferred about 4,000 houses to customers in the past seven years.
Abiy Hailemariam, who works for Noah, told Capital that the company is currently constructing 3,000 houses that will be transferred to customers using different arrangements.
According to sources, in the past the company has managed the sites of other real estate companies and has even transferred houses without further charge to those who paid the original developers but were unable to get their homes and were waiting for several years.
A few months ago, the company leaders told journalists that they use other real estate developers’ plots to construct houses for individuals that have a contract with the original developers. Noah sees this as a win/win situation.
According to sources, the company is currently in the final stage of taking over other real estate developers site to continue projects.
“The management of the company is in discussions to manage an over 30,000 square meter site from another developer,” sources said. They declined to give details and the name of the company who transferred the plot to Noah. “The agreement will be finalized in a few weeks and we will disclose it then,” a source at the company stated. Ambassador is one of the biggest developers in the city.
The company has also commenced the construction of a G+35 building at a site called Legehar in the heart of Addis Ababa. This type of huge building will be a first for the real estate developers.
“The building will be for office purpose but we will follow different approach on that project,” Abiy said but declined to give further.
Recently Noah has introduced a new scheme that allows customers to settle their payment in a different time frame than the new business platforms to expand access to homes for citizens and the Diaspora. The platform includes a mortgage scheme with partner bank that will allow home buyers to pay off their homes over 20 years.
“Most of our clients are Ethiopians. If we estimate about 80 percent of buyers are locals, while the balance is the Diaspora,” Abiy estimated. He explained that currently buyers come through different schemes to buy houses.
Even though there are challenges he thinks business is as good as the past. “The real estate industry in my view and in our company has not declined,” he says “So far I am satisfied.”
Rateneh Fassil, who also works for Noah, said that Noah’s projects are like the government housing projects. “We are massively building houses like the government project,” he said.
Bottled water prices rise rapidly
Power shedding is leading to bottled water price hikes. A six pack of two liter bottles and 12 packs of half liter bottles have gone up by around 4 birr, according to a beverage industry insider.
But not all bottlers have raised their prices. Dominant players like Aqua Addis, Gift, Care and Top raised prices starting last week however the four companies have not raised prices consistently, as some increased prices more than others.
For instance, the increase in Aqua Addis is four birr per pack of two litter bottled water and stands at 60 birr, while others are charging 58 birr for a similar package.
“The rate of the latest increase rate is higher than the past trend,” sources close to the issue said. They added that in the past the increase was about 2 birr per pack, so the current hike is relatively higher than normal.
Representatives at the factories say the electric outages have forced them to increase prices. An individual who said they represented the Ethiopian Bottled Water and Soft Drinks Manufacturing Industries Association (EBWSDMIA) told Capital that the power shortage plays a heavy burden for the factories. They said via phone that their power cuts are more severe than the mere shedding and price hikes on raw material is another reason bottled water prices are rising.
Some disagree with this saying there is not a shortage of raw material.
Ashenafi Merid, General Manager of EBWSDMIA, told Capital that challenges in the production process could lead to price increases. He underlined the power issue as the major problem.
Not all bottled water companies are raising their prices however, even though they also face challenges from the power shedding.
“We are distributing the power just like other industries,” Melaku Taye, Public Relation Head of Ethiopian Power Utility, told Capital. “Light industries like water packaging are shedding every 24 hours. They (such kind of industries) will compensate their production when they access the power for the other 24 hours,” he added.
“If there are similar factors other factories can react and increase on their production, but we will see the others response may be in the coming weeks,” one of the sector actors told Capital.
Capital has learned that the price of raw material has not risen in the latest market. One of the manufacturers confirmed no price change on the raw material and stated; “currently the price of raw material and its supply is in a stable situation,” he explained.
The association representative argued that the production cost for using generators has increased and there is also scarcity of raw material and its price change.
The price rise has created confusion in the market, with other bottlers. Most bottled water is selling for at least 55 birr for a six pack of 2 litter bottles.
The sector expert stated a couple of months ago almost all of the factories increased their prices due to the lack of foreign currency to get the raw material properly with a suitable price.
Prices have risen sharply over the past few months. Currently there are over 80 water bottlers registered in the association and 15 new comers are getting ready to begin production.
