Six Al-Shabaab fighters arrested in security swoop in Somalia

Africa Union (AU) peacekeepers and Somalia government forces on Wednesday arrested six Al-Shabaab fighters in a joint security operation at Lego neighborhood in lower Shabelle region, southern Somalia.

Somali government official in Lego, Abukar Isak, said the operation was conducted in Jame'o, Yakbari-weyne and Lego regions, adding that it was not clear whether key leaders of the Islamist group were killed during the operation.

"Somali National Army with support from AMISOM conducted a joint security operation against Al-Shabaab terrorist group here in Lower Shabelle region earlier today. We arrested six suspects and recovered weapons during the operation, we believe they are Al-Shabaab fighters," Isak said.

He said the suspects who are being held in custody will be interrogated with a view to getting more information from them that may lead to the arrest of their colleagues still at large in the region.

The Al-Qaeda-linked group has engaged the AU peacekeepers and the Somali government in near daily attacks especially in Mogadishu and regions bordering Kenya.(Xinhua)

AfDB approves USD 76.11 mln loan

The Board of Directors of the continental development bank, the African Development Bank Group (AfDB), on Wednesday, January 13, 2016 approved a loan of USD 76.11 million from the AfDB financing window to Ethiopia for the implementation of the four towns’ water supply and sanitation improvement program.

The four program beneficiary towns are Adama in Oromia, Adwa in Tigray, Bichena in Amhara and Gode in Somali regional states.

The program aims to improve the health and socio-economic development of the residents of the four towns through increased access to sustainable water supply and sanitation services and improvement in the delivery of the service.

The aggregate average water supply and sanitation access in the four beneficiary towns is estimated at 53 percent for water supply and 76 percent for sanitation and the program plans to increase both to 100 percent by 2020, benefiting 635,000 residents of the towns and approximately 227,000 people in other nearby villages, towns and rural population indirectly.

(Press Release)

Ethiopian, Avianca Brazil enter into code-share agreement

Avianca Brazil and Ethiopian Airlines, both member of Star Alliance, have signed a code-share agreement to introduce code-share services between Brazil, Ethiopia, and future points beyond Ethiopia.

Through this partnership Avianca Brazil will add its code (O6) to Addis Ababa, Ethiopia connecting Brazil (GRU) to Africa (ADD), with the possibility for expansion to China and other viable Asian destinations.

On a reciprocal basis, the largest African carrier, Ethiopian, will be able to reach more destinations in Brazil through Avianca Brazil network under ET code.

Upon the official announcement made during the Star Alliance Chief Executive Board meeting held in Chicago, USA on December 9, 2015, CEO of Ethiopian Airlines Group, Tewolde Gebremariam, remarked, “I wish to thank Avianca, a fellow Star Alliance member, for this mutually beneficial codeshare partnership. Our codeshare partnership will give our customers traveling between Africa and Brazil, the best possible connectivity options with one ticket and one single check-in at first boarding airport.”

(Press Release)

Ethiopia, Germany to host informal talks on Sudan’s armed conflicts

The African Union has said informal talks between the Sudanese government and the rebel Sudan People’s Liberation Movement-North (SPLM-N) would resume in the German capital Berlin on January 22.

The AU announced that the first round of informal talks on Darfur between the government, the Justice and Liberation Movement (JEM) and Sudan Liberation Movement - Minni Minnawi (SLM-MM) be held in the Ethiopian town of Debre Zeit on January 23.

The government and the SPLM-N last December held a successful first round of informal talks that allowed the two warring parties to build confidence and to better understand the positions of each other.

The mediators hope that similar meetings on Darfur conflict could be a success and break the stalled talks with Darfur groups.

Director of the African Union’s Liaison Office in Khartoum, Mahmoud Kan Thursday said this second round of informal talks between the Government and the SPLM-N will be held in Berlin on January 22 in collaboration with the German government.

(Sudan Tribune)

The British gold exploration and development company, KEFI Minerals, on Wednesday announced that it is holding talks with debt financiers who have shown a keen interest in extending a 100 million dollars loan for the development of the Tulu Kapi gold mine in western Wellega. 

KEFI said it is holding discussions with potential debt financiers who will stump up USD 100 million. The total capital cost of building Tulu Kapi gold mine is 120 million dollars.

In a statement issued on Wednesday, KEFI said it has agreed a series of tweaks and refinements to its Tulu Kapi gold project that enhanced further the economics of the planned mine. The company said the changes were made after discussions with potential debt financiers, who will stump up 100 million out of the 120 million dollars of capital costs of building Tulu Kapi, and after talking to other partners.

The chairman of KEFI Minerals, Harry Anagnostaras-Adams, said the development and financing plan has been further improved with the syndicate of contractors and bankers which has emerged from rigorous international selection process. Harry said despite very tough capital market conditions, Tulu Kapi's robust economics has attracted support for production start-up in 2017 as planned.

“Whilst we continue to optimise our financing options pending finalisation and approval by the National Bank of Ethiopia in mid-2016, we have already selected our preferred syndicate of contractors and the investors of equity and non-equity capital, and look forward to working with this high calibre consortium to bring this project to fruition."

The Tulu Kapi gold mine, which is under development at a cost of 120 million dollars, will have the capacity to produce 28,875 kg of gold in the coming ten years. After completing the feasibility study KEFI Minerals signed large-scale gold development agreement in April 2015 with the Ministry of Mines, Petroleum and Natural Gas. Under Ethiopia’s mining law the government of Ethiopia has a five percent stake on Tulu Kapi mine.

Recently, KEFI asked the Ethiopian government to invest up to 20 million dollars on infrastructure near the Tulu Kapi gold mine and increase its stake on the gold mine project. The infrastructure development project may include road construction and electrification. The company also proposed an alternative idea for the Ethiopian government to invest up to 20 million dollars in cash and acquire proportional shares.

KEFI said the equity financing portion of the build (20 million dollars) is being provided by the Ethiopia government.

The Ethiopian government has agreed to invest in the gold mine development project. Tolosa Shagi, the Minister of Mines, Petroleum and Natural Gas, told The Reporter that the government is interested in investing in the infrastructure development in the mine area. Tolosa said the government is studying the amount of investment required to improve the infrastructure near the mine.

Mela Industries, a local engineering firm, announced on Tuesday that it would start testing the Automatic Teller Machines (ATMs) that the company has manufactured and assembled locally.

According to Naol Addisu, CEO of Mela Industries, the ATMs have already been tested at a factory level but they need to be tested on a functional manner at the banks before getting into a full-fledged production.

“We have been approached by some of the banks so that delivery will no longer be delayed,” he said.

Mela Industries was established in 2013 with its plant in Sebeta, Oromia Regional State. Having the vision of creating East Africa’s first ATM manufacturing and assembly plant the company was founded with an investment cost of some 50 million birr.

“We had a shared dream while attending computer engineering and international business studies in the US,” the co-founder and vice CEO of Mela, Liya Hailu, said.

Having conducted a survey on the growing electronic banking service in Ethiopia, Naol explained why the company came up with the idea of manufacturing ATMs in Ethiopia. “There is a great demand here and we are working to meet that demand,” he said.

In addition to the impact it would have in saving foreign currency, Naol said that the firm could be an exemplary one in transferring skills and technology. The ATM manufacturing firm has been working jointly with giant state-owned corporations such as Ethio-Telecom, the Metals and Engineering Corporations (MetEC) and the Ministry of Information and Technology to realize the plant.

According to Naol, the Commercial Bank of Ethiopia and several other banks are in line to get the ATM machines that are manufactured locally in a prerequisite basis and production will only be under way as soon as a bank signs order agreement that has a down payment procedure.

The House of Peoples Representatives (HPR), during its regular session on Thursday, approved five Member of Parliament (MPs) nominated by the House Speaker, Abadulla Gemeda, to represent the house in the Pan-African Parliament (PAP), constituting the Pan-African Parliamentary group in the HPR.

PAP is one of the multi-member parliaments that the HPR is actively participating as part of its foreign policy framework.

The five MPs, who obtained absolute majority vote are Shitaye Minale, Deputy House Speaker, Atsibha Aregawi, Hordofa Bekele, Seharla Abdulahi and Tekle Tessema. Shitaye was selected to chair the parliamentary group which will be a member of PAP.

The four members of the parliamentary group came from each major party in the ruling front the Ethiopian Peoples' Revolutionary Democratic Front (EPRDF): the Oromo People's Democratic Organization (OPDO), the Tigryan Peoples Liberation Front (TPLF), the Amhara National Democratic Movement (ANDM) and the Southern Ethiopia Peoples' Democratic Movement (SEPDM). Meanwhile, the one member of the group Seharla Abdulahi, an MP representing Somali People Democratic Party (SPDP), come from the group of parties referred to as affiliates.

Nevertheless, the representation in the group has not satisfied two MPs, themselves from affiliate parties, and objected demanding that more affiliates should have been represented in the group. The Speaker, who made the nomination, was quick to dismiss the claims arguing that it is not a number game.

PAP is intended to be a platform for people from all African states to take part in discussions and decision-making process on the problems and challenges facing the continent. Currently, the Parliament sits in Midrand, South Africa.

The Parliament has up to 250 members representing the 50 AU Member States that have ratified the protocol establishing it (five members per Member State).

According to the PAP Rules of Procedure, a parliamentarian’s tenure of office begins on the date he or she is elected or designated as a Member of Parliament. Meanwhile, a parliamentarian’s term should correspond to his own national parliament term or any other deliberative organ that is elected or designated by the parliamentarian.

During the past Ethiopian parliamentary term, Ashebir Woldegiorgis (MD), was the vice president of the Pan-African Parliament. He was also the sole independent member of the parliament in the then house after he won the election in Bonga town of Southern Regional State after he had fought hard in a bitter competition with another well-known figure in the ruling party, Birhanu Adelo, in 2010. He, however, lost the parliament seat in the current parliament after he was defeated by another candidate of the ruling party, Mebratu Gebremariam (PhD), in another still controversial election which have been marred by the violence after Ashebir’s and his rival's supporters clashed during the last days of the election campaign.

In a related development, the house has also approved seven more draft bills that help cement Ethiopia’s relations with other countries.

Among the draft bills, which were endorsed in its regular meeting on Thursday, visa exemption agreement for diplomatic and service passport holders of Seychelles, Tunisia, and Turkey are the major ones.

According to the agreement, citizens of Ethiopia and the three countries holding diplomatic or service passport will be exempted from visa requirement.

Similarly, the house also approved the agreements that had been signed with Senegal, Togo, Sierra Leone, and Uruguay.

The agreements will enable strengthen Ethiopia’s relations with the countries in the areas of peace, education, trade, health and other sectors.

The newly assigned Commissioner of the National Planning Commission, with a ministerial portfolio, Yinager Dessie (PhD), met with the local media announcing that second generation of the Growth and Transformation Plan (GTP-II), a plan expected to transform the country into Africa’s manufacturing hub, has entered into its commencement phase and expects moderate inflation in the plan period.

The Commissioner explained that in five years’ time a moderate inflation, which is within tolerable limits, is expected to be one feature of macroeconomic environment. In recent months, the headline inflation rate which was largely tamed within single digits is showing an upward trend. In fact, the headline inflation since it passed the single digit limit has managed to peaked 12.4 percent although it showing signs of decline last month.

The Commissioner highlighted the second five-year plan in relation to the ambitious targets that are set to be achieved. The new economic plan, first and for most, envisages to sustain an 11 percent annual GDP growth to achieve the middle income status by the end of 2025.  The plan ambitiously sees to amass some half a trillion birr revenues from taxes. Both the public and private investment targeted to reach some 4.4 trillion birr in five years, the Commissioner explained. Furthermore, the country’s GDP is expected to reach some 2.5 trillion birr in the GTP-II period.

For that to materialize, huge financing is required. The state of the export regime, the drought and productivity of agriculture and the industry sectors currently remain way too low to meet the extended financing needs, according to commentators. For instance, during the first quarter of the current fiscal year, export revenue is showing a further decline compared to the same period in the previous fiscal year.

As far as Yinager is concerned, the required finance would largely be mobilized from domestic sources. He, however, failed short of outlining the detailed plan to mobilize the finance from domestic sources. However, the GTP-II document indicates that saving to GDP ratio is expected to reach some 29.6 percent. Domestic revenue is targeted to reach 19 percent in relation to the GDP and investment is planned to reach at 43 percent in the coming five years.

For the commissioner, lack of financing is not going to be a major hurdle for the government in executing the plan. For him, ensuring productivity, addressing quality issues and increasing exports of agricultural and industrial outputs is the major task the government has to complete.

Critical shortage of foreign currency, lack of execution capacity, widening of the trade deficit, low level of balance of payment, acute outages of power and the like are some of the issues that are challenging the macroeconomic environment at present. Yet, the commissioner eagerly stated that GTP-II will be a remedy to such challenges.

Agriculture, despite being affected by the current drought and food shortages is expected to play a critical role. Currently, some 10 million people are experiencing food shortage in the country and for that reason some commodities like cereals and oil seeds but sesame have been banned from export. The action is believed to further hamper the ill-fated performance of the international trade of the country. However, the commissioner says these conditions will not seriously impact the exports. He explained the ban was instated to stabilize prices and maintain consumption trends intact. 

When asked whether the government will consider further devaluation measures as the International Monetary Fund (IMF) are advising arguing the birr is overvalued against the major basket of currencies, Yinager reacted that the government prefers to exercise cautious when it comes to macroeconomic issues rather than jumping into measures. However, he indicated the existence of ample policy room should the government decided to do so.

This week, the government of Ethiopia has commenced with cleaning up the longstanding mess at Access Real Estate SC, with police arresting Ermias Amelga, founder and board chairman of the real estate company, on Monday while continuing its investigation on the board of directors and shareholders of the company.

The investigation will not be limited to the real estate company; it will also examine government official’s involvement if there is any, Justice Minister, Getachew Ambaye, assured victims on a consultative meeting between home buyers and the technique committee held on Monday before the arrest of Ermias.

More than 2500 individuals have entered a contractual agreement six years ago to buy homes from the real estate company. Almost all the 2500 individuals have paid the full amount, some of them in foreign currency from abroad via wire transfer believing that the company will deliver on its promise to construct and handover the homes within 18 months.

Access Real Estate has collected a total of 1.4 billion birr but before a row broke between the home buyers and the company. According to home buyers, Access has delivered nothing so far. It was also mysterious how the company failed to deliver one home in seven years time let alone in the 18-month deadline and was baffling where all the money had gone.

Mekuria Haile, Minister of Housing and Urban Development, said on Monday’s meet that, although Access is a real estate developer, not even a single square meter of land is registered legally under its name.

Mekuria is also a chairman to the high level committee setup by Prime Minister Hailemariam Dessalegn to protect the home buyers' right and also to look into the overall problem.

There is also a technical committee chaired by Nuredin Ahmed, an advisor to the Trade Minister. This committee has negotiated with Ermias Amelga to bring him back home from Dubai where he was in self-exile in fear of prosecution regarding an alleged blank cheque he issued.

There were a total of 81 criminal charges against Ermias when he decided to come back in February, 2015. However, all the criminal cases were allegedly suspended by the government giving him a one year guarantee against any criminal charges against Ermias. According to some reports, the deal with the government requires Ermias to solve the problem within the given period of one year.

Nonetheless, in past ten months, the action of Ermias was not living up to the expectation of officials and home buyers. The technical committee and the high level ministerial committee, who were looking into the case, found out that Access’s saga is a complicated case and have ruled it out as a criminal undertaking.

“The real estate company was not legally recognized for the last four years; therefore, we had to re-register the company with 31.2 million birr,” the justice minister told home buyers in the meeting. According to the minister, it would be difficult to protect home buyers' rights if it is not a legal entity.

Mekuria Haile, chairman of the special committee, said on his part that there are 41 plots in various parts of the city associated with Access, some of them are purchased illegally from individuals and companies, while some are secured with a joint venture arrangement with other real estate developers. “But there is no plot acquired legally by the company,” he said.

Asmelash Woldeselasie, government whip at the House of Peoples Representatives (HPR), also confirmed that the government will investigate how and when this company was formed; furthermore, how it performed as a business will also be looked into.

The special ministerial committee has offered a maximum of two weeks to the board of Access Real Estate to come up with a tangible solution, while another three weeks is given to the home buyers association to propose their own solution.

The Chinese petroleum company, Poly-GCL Petroleum Group Holding Limited, is conducting well-testing in the two gas appraisal wells it drilled in the Calub and Hilala gas fields in the Ogaden basin.

Poly-GCL recently finalized the drilling of two gas appraisal wells in the gas fields. In the history of oil exploration in Ethiopia, Poly-GCL has become the first company to import and operate two drilling rig machines.

Tolosa Shagi, the Minister of Mines, Petroleum and Natural Gas, told The Reporter that this is the first time for an oil company to operate two drilling machines in Ethiopia. Tolosa said the wells will enable the company to determine the gas reserves in the Calub and Hilala gas fields.

Poly-GCL started drilling Calub11 and Hilala5 appraisal wells in October 2015. A senior petroleum expert at the Ministry of Mines, Petroleum and Natural Gas, told The Reporter that experts of Poly-GCL are conducting the well-testing. “This is not an effort to check if there is gas in the wells. But this test will enable them to learn about the gas reserves that were discovered many years ago. They are trying to confirm the gas reserves,” the expert said.

Previously, 10 wells were drilled in the Calub gas fields. Out of these eight were made ready for gas production. The Calub gas field is located 1200 km south-east of Addis Ababa. Hilala is 80 km further to the east.

According to the petroleum expert, Poly-GCL will prepare a gas field development plan based on the reserve estimate. The gas reserves in Calub and Hilala are estimated to be four TCF (trillion cubic feet). Another 0.6 TCF gas reserve was discovered by Petronas, Malaysian oil and gas giant, in Genale locality.

Poly-GCL is acquiring 3D and 2D seismic data from its concession in the Ogaden basin. Officials of the Ministry of Mine, Petroleum and Natural Gas, are happy with the progress Poly-GCL is making.“They have intensified the seismic data collection. They are using two rigs to conduct drilling appraisal and exploration wells. They are doing a very good job,” Tolosa said.

In November 2013, Poly-GCL signed a petroleum development agreement with the Ethiopian Ministry of Mines that would enable the company to develop the Calub and Hilala gas fields located 1200 km south-east of Addis Ababa. The company has also agreed to search for oil and gas in eight exploration blocks in the Ogaden area with a total area of  117,151sq.km.

Poly-GCL plans to construct a 830 km gas pipeline all the way from the Calub and Hilala gas fields in the Ogaden basin to the Port of Djibouti and to build a gas treatment plant at the port. The company plans to produce three million tons of Liquefied Natural Gas (LNG) annually and mainly export it to China through the port of Djibouti.  The total amount of natural gas the company plans to pump out from the two gas fields each year is 4 billion cu. m. The total investment cost of the gas development project is estimated at four billion dollars. The company hopes to start gas production in 2018. Tolosa said the ministry expects the company to launch production at the end of the second GTP. 

Experts say that the project is very complicated that production may not begin in 2018. “The pipeline design and construction work is time-consuming. Even the negotiation on the pipeline construction between the governments of Ethiopia and Djibouti will take a prolonged time,” an independent petroleum expert told The Reporter.

“They also need to discover additional gas reserve in the vicinity of the existing gas fields. Other-wise the project might not be feasible. The constriction of 800km gas pipeline and a gas treatment plant is very capital-intensive. That could cost four billion dollars. And 4 TCF gas reserve might not be suffice to make profit out of the project,” the expert said.     

The gas reserves in Calub and Hilala localities is estimated at 118 billion cubic meters (4TCF). The gas reserve was first discovered by an American oil company, Tenneco, in 1972. Crude oil reserve was also discovered in the Hilala block. A total of four wells were drilled in Hilala gas field.  The Russian company, Soviet Petroleum Exploration Expedition (SPEE), confirmed the gas reserves in Calub and Hilala in the 1980s.

The Federal Supreme Court yesterday dropped 17 out to the 23 charges established by the prosecutors of the Ethiopian Revenues and Customs Authority (ERCA) against Ayat SC and its founder and CEO Ayalew Tessema.

According to the court order, Ayalew's 12-year sentence has been reduced to eight years while his top finance executives Mehari Mekonen, (PhD) and Getachew Agonafer, who were also sentenced by the Federal High Court to serve a 12-year prison and a 10-year term, had their sentences reduced to five and seven years, respectively.

It was back on May 22, 2013, that the Eighth Criminal Bench of the Federal High Court, Lideta Division, passed a 12-year sentence against Ayalew, a 90-million birr fine against the company and ruled that construction machinery worth some 86 million birr be confiscated.

Back then prosecutors of ERCA requested the court to hand down more that 2-billion-birr fine against Ayat SC and a 79-year jail term and a 2.7-million-birr fine. Ayalew was found guilty of multiple counts including violating a raft of banking and monetary legislations, the Value Added Tax, Income Tax and Customs proclamations as well as the Criminal Code.

According to the Federal High Court's decision, the share company was fined 90,091,270 birr while Ayalew was ordered to pay 3,235,543.50 birr in fine.

Now the Federal Supreme court has reduced the sentencing and ruled that the company pay 1.5 million birr under three counts.

Ayat SC, before becoming a share company, was a private limited company established in 1996 with a total capital of five million birr and with an objective of alleviating shortage of housing through building and transferring standard residential houses with different sizes, designs, types, locations and payment schemes.

Ayat was the first private organization to appear in the real estate business and had a strategic goal of building and marketing 25,000 residential houses. To this end, Ayat has constructed and handed over thousands of residential houses.

The latest decision made by the Commercial Bank of Ethiopia (CBE) to approve requests of Letter of Credit (LC) worth more than two billion dollars has drenched private commercial banks of their liquidity as customers rushed to withdraw their local currency deposits from other commercial banks to take advantage of the hard currency bonanza at the CBE.

According to unconfirmed reports, the CBE has received a dollar injection amounting to 2.2 billion dollars from the government at which time the bank decided to settle longstanding requests of Letter of Credit lodged by members of the private sector since the past six month. Furthermore, the bank has also notified customers that in the window that will last only two weeks anybody can get an unlimited access to foreign currency should they wish to do so.

Given the longstanding foreign currency hunger in the economy, the private sector responded quickly to the offer by depositing local currency equivalents, most of which were deposited in the private commercial banks. Traditionally, the CBE, when it comes to LC, prioritized the manufacturing sector, however, in recent times severe shortage of foreign currency has hampered the manufacturing sector.

According to sources, the latest approval of LC requests is not limited to the manufacturing sector; in fact, the bank has moved to take a sweeping approval of LC requests and the impact looks to have reverberated across the industry in the past two weeks.

As far as the figures are concerned, the reports indicate that the loss of liquidity could be as high as 1.3 billion birr in the span of two weeks in one of the biggest private banks in Ethiopia. Furthermore, a banker who requested anonymity, told The Reporter that his bank has lost close to 400 million birr in the stated time. Scattered data, shows that some of medium and large banks have lost 700,000, 800,000 up to 1 billion birr.

Nevertheless, industry estimates aggregate the figure as high as 4.4 billion birr with worst consequences for the operation of the banks. According to sources, what complicated the problem is the somewhat unusual request of the CBE to compel customers to deposit 100 percent of local currency equivalents if they want the have LC requests approved. The usual practice, sources explain, is that customers would be requested to deposit 20, 30 or 50 percent of the local currency equivalent of the LC amount they requested.

On the grand scheme, commercial banks are crying foul since the state-owned bank’s conduct is unchecked by the National Bank of Ethiopia (NBE), the regulatory organ of the country's finance sector. This is a bank owned by the public and it should carry some responsibilities, they argue. On the other hand, there are some bankers who criticize the action of the government in deciding that CBE should get a hold of huge amount of foreign currency, and not thinking of being fair for the other private banks.

According to a banker who wanted to stay anonymous, even after the currency is given to CBE, the regulatory organ should have placed a limit either on the time or the amount of currency that it can sell to the local market for it is clearly dangerous for the industry.

Reports, however, indicate that, banks have appealed to the NBE and asked for corrective measures to be taken immediately. NBE on its part is reported to have requested the banks to submit the estimates of the liquidity that is lost to CBE in the stated time and promised to review the situation as soon as possible.

The first-ever Media Council was established on Tuesday at the United Nations Economic Commission for Africa (UNECA) Conference Center. With the saga far from being over the Ethiopian Media Council (EMC) is now ready to meet challenges ahead. Pictured from left: Amare Aregawi, GM of Media and Communications Center and chairman of the Executive Committee of EMC; Meaza Birr, GM of Sheger FM; Meseret Atalay, President of Ethiopian Journalists Association; Tamirat Hailu, Managing Editor of Kumneger Magazine and Abraham Gebremedhin Deputy GM of Ethiopian Broadcasting Corporation (EBC). Click Here to read the full story.

The Geneva-based Arbitration Tribunal – operating under the auspices of the International Court of Arbitration of the International Chamber of Commerce – dismissed all of PetroTrans’ claims that the Ministry of Mines unlawfully terminated the Calub and Hilala gas fields appraisal and development agreement as well as four other exploration agreements signed in July 2011.

According to reliable sources, in the case that took three years to complete, the Geneva Tribunal unanimously gave total victory to Ethiopia by rejecting PetroTrans’ legal claim to be reinstated or awarded compensation in the amount exceeding 1.4 billion dollars.

Poly-GCL, the Chinese company that took over all five blocks from PetroTrans, has recently announced that it is making significant progress in Calub and Hilala appraisal activities.

In the proceedings, the Ministry of Mines was represented by a Washington DC-based boutique firm specializing in arbitration, Addis Law Group, (formerly known as Addis International Arbitration Group LLP) in collaboration with the DC office of Greenberg Traurig. PetroTrans was represented by two prominent firms: first by Norton Rose Fulbright, but later by Lalive.

It appears that this was one of the biggest arbitration matters that any African state has decisively won. It is to be recalled that Uganda also recently successfully defended against a USD 400 million investor claim, which was at the time considered to be the largest claim in Eastern Africa.

Four agro-industry parks to be built in GTP-II

The Ministry of Industry is aspiring to revamp the country's agro-industry sector by undertaking various activities including building agro-industry parks during the second Growth and Transformation Plan (GTP-II) period and hosting an international agro-industry forum next May this year.

According to Mebratu Meles (PhD), state minster of Industrys his ministry is aspiring to enable the country unleash its full potential in the agribusiness.

Mebratu acknowledged the shortcomings of the sector in the first Growth and Transformation Plan (GTP-I) period and said that a lot of work needs to be done to revamp the sector. “On behalf of the government I can say that the sector will get special attention that will be revealed in many ways,” he said. And, according to him, hosting an international agro-industry forum is one of those activities planned to take place this year highlighting the fact that the process is still ongoing. “This event will be crucial in networking with international agro-industry players, researchers and investors,” he added.

The other crucial step being taken, according to him, is setting up agro-industry parks in four regions that have a direct link with agribusinesses. He pointed out that the Humera locality in the Tigray Regional State, Bure in Amhara, Adamitulu in Oromia and Sidama, the Southern Regional State, are the four areas being surveyed for constructing the parks.

Doubling the current 4.1 billion liters of annual milk production, increasing the number of agro-industries from 17 to 34 and artificial inseminating some five million cattle are some of the critical plans in the GTP-II. “All these can only be done when we are able to change the traditional animal feed that usually causes low-yield and contamination,” he said.

In addition to changing the traditional feeding system that almost all farmers follow across the country, all the sugar factories are expected to have animal feed processing units on the sideline. Moreover, improving facilities in collecting, storing and processing milk and other animal products is vital, he stated.

According to Robert Kariuki, a livestock specialist from Kenya, Ethiopia has to make clean water available for its cattle in all areas. Special attention should also be given to the feed sector. He pointed out that Borana, also known as Zebu in some parts of East Africa, are by far the native breed that dominate the cattle resource in the country and said that they will result in surplus production once they are bred from more-yielding breeds.

An American investment firm, Schulze Global Investments Limited, has completed the acquisition of a 45 percent stake in MB PLC, producer of Family Milk.

Speaking at the announcement ceremony, which was held at the offices of Schulze Global Ethiopia, located off Cape Verde Street, Greg Metro, managing director, said that the growing Ethiopian market has already led the investment firm to add Family Milk in its business portfolio, making it the company's sixth investment in Ethiopia.

Founded by Mechal Argaw, Family Milk has been in the dairy market for the past fifteen years. “This time we have come up with our next development plan that is realizing a joint venture with a globally competitive firm,” Dawit Mechal, representative of Family Milk, said.

According to Metro, the joint venture will triple the production of the firm and enhance the quality along with strengthening the task force in addition to new recruitments. “Ethiopia’s growing market is new and full of opportunities,” Metro said at the press conference.

“We usually do business the way we have done around the world for decades. So this deal will be a genuine one fulfilling the standard production system,” he said. He added that all the necessary preconditions have been maintained ahead of full scale production restoring capacity through skilled manpower from the farm to the factory level. He said that the amount of capital injected is “confidential”.

Schulze Global manages several hundred million dollars of investments across various markets in Asia, Latin America, and Africa and works in partnership with some of the world’s most prestigious partnership institutional investors. The company is the pioneer of private equity investing in Ethiopia having raised the first country-focused private equity fund in 2013 and has had a local team operating since 2008.

The firm has made growth equity investments in Ethiopia across a variety of industries including

food-processing, construction, pharmaceuticals, coffee, education, and dairy.

Speaking at the ceremony, Mebratu Meles (PhD), state minister for Industry, said “The key agenda in Ethiopia now is how to translate growth into sustainable and inclusive development by driving structural transformation of the economy. Schulze Global’s investment in Family Milk is aligned with the government’s strategy in GTP-II which focuses on developing a robust manufacturing sector.”

He added that the government encourages these types of partnerships and investments as they help improve the international competitiveness of domestic manufacturing firms.

Buildings owned by Nigma Motors PLC, a joint venture company formed with a local firm, Nigma Agro-Industry PLC, and the Ukraine-based car-maker Zaporiziha Automobile Building Plant (ZAZ) Company, have been demolished by local authorities just a year after the assembler announced operations here. A dispute between the assembler and local authorities led the later to claim that the buildings constructed were illegal.   

It is to be recalled that while launching the assembly plant and sales, officials of the company said that the joint venture has secured some 7,500sqm plot of land around Wingate area in Addis.

However, authorities of district (woreda) 10 at the Gulele Sub City demolished some parts of the plant citing legalities. According to the Addis Ababa City Administration, the authorities were forced to act because the company has failed to secure legal permits for the vehicle assembly plant to be erected on the plot.     

Daniel Tamirat, marketing and sales head of Nigma Motors told The Reporter that some 40 percent of the plant has been already demolished; machineries and a car have also been damaged and monetary values are yet to be figured out. Police barred reporters, who were around during the demolition that took place on Monday, from nearing the compound. The company took the case to court the next day so as to halt further damages. The Federal First Instance Court 14th Civil Bench at Lideta issued a suspension order against the authorities until February 5.

Last year Nigma Motors assembled 35 vehicles. Daniel told The Reporter that the measure taken by local authorities took place while the company was rigorously spending to assemble more vehicles. He said that the company was set to invest over 57 million birr initially. According to Daniel, the company planned to swell up the investment to 100 million birr. Currently, 20 knocked-down car parts have reached the Port of Djibouti, he said. Ten more are shipped from Ukraine and are scheduled to arrive soon.

ZAZ, as one of the giant Ukrainian car-makers, is referred to as one of the sole enterprises in Ukraine operating full-scale cycle of passenger cars production which includes stamping, welding, painting, body trim and assembly lines. Established in 1923, ZAZ is well known for manufacturing cars, vans and buses.

ZAZ was amalgamated with Daewoo Motors in 1998 based on joint venture agreements reached by the two sides. Lately from 2005 onwards the car-maker inked agreements with General Motors and opened plants which performed complete knocked-down assembly lines for Chevrolet Aveo, Chevrolet Captiva, Chevrolet Epica, Chevrolet Evanda and Chevrolet Lacetti model cars. ZAZ has business relations with Opel, Cherry, Kia and Mercedes Benz and the like.

The models assembled here include ZAZ Forza, ZAZ Sens, ZAZ Vida and ZAZ Chance vehicles both in the sedan and hatchback styles. Nigma Motors website gave accounts of prices for some of the assembled models ranging from USD 15,686 to 23,985 per car. Back in 2012, ZAZ has registered a total revenue of some half a billion dollars yet the net income stood only at some USD 28 million.

The Procurement and Asset Disposal Complaints Review and Decision Setting Board (PADCRDSB), last week, canceled a bid announced by the Pharmaceutical Fund and Supply Agency (PFSA) and won by Bio-Tech PLC for the supply of imported HIV diagnostic kit to the Ministry of Health (MoH).

The Board, which is the ultimate body that deals with procurement and malpractice of purchasing, decided to terminate the bid after reviewing complaints received from another local bidder Medica Pharma PLC.

The Board stated that the procurement procedure had never been free of irregularities that the entire bidding process is found to be subjected to legal probe.

In a formal letter the Board wrote to the Agency and copied to the MoH and the Ethiopian Public Health Institute on January, 15, 2016, the bidding procedure was not lawfully conducted that a certain legal step had been breached by those involved in the bidding and purchasing process.

Moreover, the board revealed that the party that claimed to have won the bid has not been registered as HIV diagnostic kit supplier. Rather it appeared to be named under malaria diagnostic equipment category by the World Health Organization (WHO) prequalified diagnostics list for Africa.

The board wrote that the “WHO prequalified diagnostic” has dishonestly been described under the “List of diagnostic eligible to tender for procurement by WHO in 2015” to prompt cancellation on the tender. “First Response HIV1/2 Card Test” was to be purchased by local pharmaceutical firms that had been provided by Bio-Tech PLC.

In relation to the bidding process, the Federal Ethics and Anti-Corruption Commission (FEACC) in a letter wrote on November 4, 2015, stated that the whole process was full of irregularities and was corrupt and called for further legal investigations to be conducted.

An Emirates airline Airbus A330 jetliner on Sunday afternoon hit the Addis Ababa Bole International Airport passenger terminal 2 bridge while it was taxiing to disembark passengers.

Emirates Flight EK723 had arrived at the Addis Ababa Bole International Airport on January 15 at 1:35pm. After landing at the airport while the A330 jetliner was approaching the passenger terminal being aided by the marshal, it hit, one of the bridges. Passengers told The Reporter that none of them or the crew members, were  hurt. The left wing of the aircraft had sustained damage. The ground handling company was unable to unload the luggage for more than an hour.

According to the passengers, they had to wait for more than two hours in the passenger terminal to collect their luggages. “No one from Emirates or Ethiopian Airports Enterprise explained to us what had happened and why we could not collect our luggages on time. Waiting for your bags for hours without being told what happened was frustrating,” they said.

Wondim Teklu, communications affairs head with the Ethiopian Airports Enterprise, told The Reporter that an accident investigation team has been formed and currently the team is looking into the matter. Wondim said the committee comprises a team of experts drawn from the Ethiopian Civil Aviation Authority, Ethiopian Airports Enterprise and other pertinent bodies. “The team is investigating the matter. At this point we cannot say anything about the incident,” he said.

Wondim apologized for the inconvenience the incident might have caused to passengers. A senior official at the Ethiopian Civil Aviation Authority told The Reporter that the result of the investigation will be revealed in due course. However, the official said the purpose of accident or incident investigation is not to blame anyone but to prevent similar accidents or incidents from happening in the future.

"A replacement aircraft was deployed on the same day to transport passengers booked on EK 724 from Addis Ababa to Dubai. Emirates flights between Dubai and Addis Ababa operate as scheduled. Emirates apologizes for the inconvenience caused to our passengers. The safety of our passengers and crew is of the utmost importance," Emirates stated in an emailed response to The Reporter.

Emirates began flying to Addis Ababa in 2006. It currently operates twice-daily flights between Dubai and Addis Ababa.

Tiret, an endowment fund of the Amhara National Democracy Movement (ANDM), yesterday inked a major deal with the newly-restructured Ethiopian Industrial Supply Enterprise (formerly known as Ethiopian Merchandise Wholesale and Import Trade Enterprise) to supply cotton.

According to the agreement, Tiret will supply one thousand tons of denim cotton to the Enterprise so that the enterprises will distribute it to textile factories.

Asifawosen Alene, director general of the Enterprise, said that they plan to store some 15 thousand tons of denim cotton throughout the year. He also added that the enterprise has already provided three warehouses in Addis Ababa, Kombolcha and Awash areas to store cotton products.

Deputy director general of the Enterprise, Abay Kebede, on his part explained that the new deal is part of the implementation of its new mandate that is aimed at assisting farmers by facilitating market access which had been a major challenges for long time. He also underscored that the Enterprise will carry out the transaction without focusing on making profit. “Our major aim is to curb the challenges in the value chain,” Abay said.

After signing the agreement, Tadele Mengiste, general manager of Tiret Loyal Cotton Production, said that the company will provide the cotton from its farm in Genda Wuha in Metema of the Amhara Regional State. The company produces and processes cotton at a plant it erected a few years ago. According to the general manager, the company is also set to erect a second cotton processing plant in the town of Chagni, Awi Zone, Amhara Regional State.

According to a study conducted by the Ethiopian Textile Industry Development Institute (ETIDI) in 2015, the country annually produces 45,000 tons of cotton. The Institute, which is also responsible for identifying cotton production investment, technology transfer as well as regulating cotton farms as part of assisting the textile manufacturing sub-sector, also revealed that the demand has reached 75,000 tons.

The Institute, however, has had an unsuccessful five-year period during the first Growth and Transformation Plan (GTP-I) as export earnings and production targets failed by more than half.

It planned to export USD one billion worth of products but managed only to amass USD 456 million. It also targeted 2.5 billion dollars in gross value of products (GVP) but achieved only USD 1.2 billion.

The major long-standing challenge is the low production of cotton, according to the Institute. Ethiopia cultivated cotton on 75,000 hectares of land in 2010/11. It planned to cultivate 265,000 hectares by the end of 2014 /15, but it only managed to cultivate 125,000 hectares.

The increasing demand for cotton among industries and the low-level of supply are the main drives for the shortage, officials said.

Last year, the minister of Industry, Ahmed Abitew said that shortage of cotton witnessed in recent years has become a challenge for the effectiveness of the textile industries. 

The industries are forced to operate below their capacity because of the shortage, he said, adding that this situation has impacted the country foreign exchange earnings.

In addition to the shortage of raw materials, the quality and market price of cotton has also been a source of row between the government, suppliers and the manufacturers. Tiret was among some of the suppliers that has been complaining about the market price of cotton.

“Cotton pricing is still a major challenge and we will still fight until we have the right price. However, we have signed this new agreement despite all the challenges and we believe that things would change through time,” Tadele said.

The European Union (EU) Parliament, in its recent motion, condemned the loss of lives and destruction of property following recent unrests in the Oromia Regional State and called for dialogue to solve the issue.

The motion, apart from condemning the loss of lives and destruction of property, also includes concerns with regard to the issue of drought in Ethiopia and the incarceration of Andargachew Tsige.

The motion describes the recent Oromo protests as “the biggest crisis to hit Ethiopia since the 2005 election violence” adding that “security forces used excessive lethal force and killed at least 140 protesters and injured many more.”

It also accuses authorities in Ethiopia of arbitrarily arresting “a number of peaceful protesters, journalists and opposition party leaders in the context of a brutal crackdown on the protests in the Oromia Region.”

The motion also called for a credible, transparent and independent investigation into the killings of protesters and into other alleged human rights violations in connection with the protest and called on the government to fairly prosecute those responsible before competent jurisdictions.

It can be recalled that the relations between the EU and Ethiopia deteriorated after the unrest in Ethiopia that followed the May 2005 elections where the leader of the European Union Election Observation Mission, Ana Gomes, cited election related irregularities.

In addition to listing the problems, the motion also calls upon the EU –
Ethiopia's single largest donor – to monitor programs and policies effectively to ensure that EU development assistance is not contributing to human rights violations in Ethiopia.

The EU also called upon the continental union to “effectively monitor programs and policies to ensure that EU development assistance is not contributing to human rights violations in Ethiopia, particularly programs linked to displacement of farmers and pastoralists, and develop strategies to minimize any negative impact of displacement within EU funded development projects”.

Recently, minister of Foreign Affairs, Tedros Adhano (PhD), traveled to Brussels the seat of the Union and discussed a range of issues with senior officials of the Union including vice president and high representative, Federica Mogherini.

Concerning the recent motion, spokesperson of the Ministry of Foreign Affairs, Tewlede Mulugeta told The Reporter that what defines the relationship between the two parties is working and focusing in the areas of peace and development and enhancing the enduring relationship of the two, which has lasted for 40 years.

Ethiopia has won the court battle against the Chinese oil company, PetroTrans Ltd, which claimed compensation payment amounting to 1.4 billion dollars for terminated petroleum development agreement at the International Court of Arbitration.

The Geneva-based Arbitration Tribunal – operating under the auspices of the International Court of Arbitration of the International Chamber of Commerce – dismissed all of PetroTrans’ claims that the Ministry of Mines unlawfully terminated the Calub and Hilala gas fields development agreement and as other four exploration agreements signed in July 2011.

PetroTrans demanded that the gas fields and exploration blocks should be reinstated or to be paid a compensation amounting to 1.4 billion dollars. The court dropped all the compensation claims and ruled that PetroTans should reimburse the Ethiopian government for the cost it incurred during the three-year litigation period.

At a press briefing held yesterday, the Minister of Mines, Petroleum and Natural Gas, Tolossa Shagi, said that PetroTrans agreed to develop the gas fields and undertake exploration work in the blocks in east Ethiopia. According to Tolosa, the company agreed to provide loan to the Ethiopian government to be used for development projects. The loan was payable from the revenue that would be generated from the gas development project.

However, Tolosa said the company not only failed to deliver the loan but also to commence work on the project. “Let alone bringing the loan the company was unable to commence work according to schedule. We revised the dates set for the launch of the project but again it failed to start the project. Hence we revoked all the five agreements,” Tolosa said.

Protesting the measure taken by the ministry, PetroTrans first filed the arbitration case to the International Court of Arbitration in December 2012. According to Tolosa, the court examined tens of thousands of documents presented by the claimant and defendants. The court also listened to technical and factual witnesses.

The court passed its rulings on December 31, 2015 and notified the litigants on January 18, 2016. Tolosa who expressed his delight with the court’s decision said that this was a victory for African countries and other developing nations. “We learned a lot from this complicated international court litigation. It enabled us to identify our strengths and weaknesses and we got good lessons,” Tolosa told local reporters.

The minister acknowledged the law office that represented the Ethiopian government at the International Court of Arbitration, Addis Law Group LLP, previously known as Addis International Arbitration Group LLP and its associate Greenberg Traurig. He also thanked governmental and non governmental organizations that assisted the ministry in providing relevant information and citizens that testified.

Officials of PetroTrans declined to comment on the court’s rulings. Executives of the company used to say that the petroleum development agreement was revoked not because they failed to commence work on the project but because of their failure to secure the loan.

Tolosa said that the failure to deliver the loan could be one of the reasons for the termination of the petroleum development agreement but the main reason was the company’s failure to commence work on the project. The minister said that the measure taken on PetroTrans would give a lesson to other companies.

The minister said that he did not have the total amount of the cost that the government spent on the court litigation.

After snatching the gas fields and the oil exploration blocks from PetroTrans the Ministry awarded all the concessions to another Chinese company, Poly- GCL in November 2013. Poly-GCL is now working on appraisal wells and collecting seismic data.

A light earthquake has hit Hawassa, one of the largest city in Ethiopia and the capital of the Southern Regional State, some 275 Km from Addis Ababa, together with other 21 Woredas in the Sidama Zone of the Southern Region late last night, it was learnt.

The shock was reported to have been felt in the town of Shashemene, Dilla and Alaba besides Hawassa whose magnitude has not yet been determined by proper authorities. However, sources on the ground gave varying account of the magnitude of the quake which ranges from 4 to 5 in Richter scale.

According to reports, damages to the University Building in Hawassa and in some condominium houses were visible. According to university officials, shattered glasses in the university campus have caused damages on students and hence some students were taken to a hospital to receive medical attention.

Based on the accounts of residents, the magnitude of quake resembles what is called a moderate shock which between 5 and 5.9 Richter scale, where mild damages to a house and objects in the house is recorded . However, quantitative estimates of the extent of the damages appear to be in light earthquake range, 4 to 4.9 in Richter scale, where minor damages such as objects in house moving. Light quake is defined as shock which is in range of 4 to 4.9 in Richter scale.        

Furthermore, residents have also revealed that the quake have caused some condominium houses to crack and window to shatter. Cracks have also appeared in the Hawassa University building, according eye witnesses in the area.

The First shock was felt around 3:38 which was the followed by two consecutive shocks with varying magnitude. According to residents, the shocks were followed by complete power blackout in the city.

Thus far, no loss of life was reported and official damage accounts are yet to come. The Great Rift Valley system is known to be the most volcanically active in Ethiopia; hawassa is with in this rift valley system.