Ethiopia - Afrikan Heroes

Ethiopia Receives Germany’s Support to Stem Illegal Migration

March 27, 2021

As Ethiopia navigates one of the world’s most complex human mobility environments, with myriad social, economic, political and climatic factors driving the movement of people within and beyond its borders. The need to address these challenges comes to the fore.

According to the latest National Displacement report prepared by the International Organization for Migration (IOM), over 1.8 million people in Ethiopia remain displaced across some 1,350 sites. At least another 1.2 million are returning from displacement to some 1,300 villages. Not spared by the onset of COVID-19, Ethiopia also had recorded by mid-March over 175,000 COVID-19 cases. More than 2,600 people have died.

Crucial among the development partners stepping forward to assist Ethiopia is the German government. Since 2019, Germany has provided financial support amounting to EUR 18 million for programming by IOM Ethiopia.

More than 280,000 crisis-affected persons are benefitting through life-saving assistance, including shelter construction and rehabilitation, access to safe water and sanitation, hygiene awareness, and site management support services in camp-like settings.

Four new Border Control Posts (BCPs) have been established and will go a long way toward reducing mobility restrictions and facilitating movement of goods, services and skills. Beyond commerce, IOM also views BCPs as vital for protecting people who may be prey to human smugglers and traffickers. The capacity of Ethiopia’s Department of Immigration (INVEA) also received a boost through the provision of equipment and training.

The funding, too, has been directed to the timely, safe, and orderly return of over 3,900 ex-combatants and their dependents who in 2018 were offered amnesty by the government.

Going forward, young Ethiopians will become the focus of a new initiative aimed at ensuring they are better informed of the risks and consequences of irregular migration. The onset of COVID-19 has also led to an increase in the number of returning migrants, some of whom have been forcibly repatriated, especially from the Arabian Peninsula.

IOM Chief of Mission in Ethiopia and Representative to the African Union and the Unite Nations Economic Commission for Africa, Maureen Achieng, commended Germany for its continued commitment to Ethiopia’s stability and development trajectory.

“Ethiopia continues to grapple with multiple challenges which in recent times have been compounded by the COVID-19 pandemic,” Ms. Achieng said. “In a context as challenging as this one, the importance of the support of a steadfast partner such as Germany, both for urgent humanitarian action as for longer-term development initiatives, cannot be overstated.”

Stephan Auer, Germany’s Ambassador, emphasized the importance of cooperation. “IOM is a decisive partner for our work in Ethiopia and beyond. With its vast experience as a humanitarian, peacebuilding, and development actor, IOM responds to some of the most important challenges in the country. Promoting safe and better migration and supporting vulnerable migrants remain some of our key priorities.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Ethiopia to further open up sectors to diaspora investment

October 9, 2020

Dr. Abiy Ahmed, Ethiopia's prime minister

As part of Ethiopia’s plan to liberalise its economy and boost investment, it is set to open up sectors that were once reserved for domestic investors. The new regulation is an extension of the country’s new investment proclamation, which came into effect earlier this year that gives equal playing field to Ethiopian-born foreign nationals and foreign investors.

“[There are] more opportunities for us as the economy opens up to invest our resources in our birth country, says Addis Alemayehu, an Ethiopian-born Canadian investor engaged in IT and one of the leading communications firms in the country.

While Ethiopia had encouraged the diaspora to invest in the nation, its relationship quickly soured following questions of human rights and democracy from activists based in western nations.

“We were even banned to sell our own shares in commercial banks when the government abruptly cancelled our rights to do so and we are now back to having been granted rights to own and sell and buy shares in banks” says Bethlehem Seifu, an owner of a digital company engaged in e-commerce.

Diaspora contribution

In the last two years since Abiy Ahmed became Prime Minister, the contribution via the diaspora in Ethiopia’s economy has shown a significant growth. Two commercial banks with an aggregate capital of $400m are under formation by Ethiopian-born foreign nationals living abroad. Annual remittance inflow also averaged $5.5bn over the last years; a significant growth from the $4bn average registered over five years before 2018.

“The diaspora will invest significantly in the coming years in the financial services sector since they have the legal security of ownership, unlike the past. We already see new financial services companies like mortgage banks and Fintechs under formation which now include diasporas as shareholders, says Zemedeneh Negatu, an investment advisor in Ethiopia.

The investment regulation also listed sectors authorised for local investors (which includes Diasporas based on its new definition) and foreigners. The cement sector, for instance, is among sectors opened up to new foreign entrants.

Cement sector

“Dangote cement is the last company that was authorised to invest in the cement sector. Making expansions and giving licenses to new entrants was not allowed for the last five years, eventually resulting in a supply gap,” says Simegn Degu, Cement and Related Industry Research Development Technology Director at Chemical and Construction Inputs Development Institute. Degu believes the new investment regulation will encourage new entrants to invest in the cement sector.

“This will also help the country give a long-term sustainable solution to the cement shortage it has been facing in recent years,” he adds.

Logistics sector

The logistics sector is also partially liberalised under the new regulation. While it opened up the sector to foreign investors, they are also required to make a joint venture with local companies and are not allowed to have more than 51% stake.

Experts say this is not enough.

“Logistics is a major challenge for Ethiopia. It is a main reason for our failure to compete globally. Full liberalisation would have been even better. Foreign capital and know-how is vital to improve our capabilities there,” says Henok Assefa, an Investment Consultant with Precise Consult.

According to Doing Business 2020, it takes 194 hours just for documentary compliance to export and 72 hours for border compliance to trade across borders. Cost to export for documentary compliance is $750; three times higher than that of Rwanda. Logistic hurdles have even discouraged exporters and made Ethiopia’s export commodities just as expensive as logistics’ expenses – sometimes three times higher than the original price of the exported goods.

On 1 October, the first transport policy and logistics policy was discussed with stakeholders. Mekonnen Abera, the Director General of the Ethiopian Maritime Affairs Authority, said a regulation to further open up the multimodal sector for private actors was sent to the Council of Ministers. Speaking to Capital, Mekonnen noted: “The [logistics] sector has received attention from the government,” adding there are about 100 intervention areas that are awaiting a response from Addis Ababa.

Power and transport sector

The regulation fully liberalised the power sector, except for exports of electricity in which foreign investors are required to partner with the state. The new regulation also allows foreign investors to engage in generation and distribution of electricity. This had been was under the monopoly of the government before the introduction of the country’s public private partnership law in 2016.

The transport sector is also liberalised under the new regulation, which allows foreigners to invest in transport services, including air, railway, ground cable car transport, cold-chain transport and marine and freight transport.

Furthermore, foreign investors can invest in sectors such as advertisement and promotion services, audiovisual services, motion picture and video recording, production and distribution and accounting and auditing services, but they cannot have more than 49% stake if they wish to invest in these areas.

Financial sector

Meanwhile, the financial sector remains closed to foreign investors in a bid to protect local banks, which are less capitalised compared to international companies. Negatu suggests strengthening the local banks and preparing them for international competition before opening up the sector. He recommends consolidation (mergers) of the relatively small 16 private commercial banks into 4 or 5 very large ones. “Banking is a scale business, you need a strong balance sheet to compete,” he says.

“Ultimately, the financial services sector will open up to international banks, it’s a question of timing,” adds Negatu. “One thing to keep in mind, the international banks that will be keen to invest in the Ethiopian banking sectors are primarily from Africa including Kenya, South Africa and Nigeria.”

Western banks from the US and Europe are not in the expansion mode in Africa and in fact in many countries they have curtailed their retail banking business and focus mostly on corporate banking or in some cases, like Barclays, pulled out of Africa completely.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Mastercard Foundation Launches $24.8 million Facility To Support Startups And SMEs in Ethiopia

June 9, 2020

Startups, small and medium scale businesses in Ethiopia have a new support from Mastercard Foundation. The Jobs Creation Commission of Ethiopia, the Mastercard Foundation and First Consult have announced the creation of the Mastercard Foundation MSE’s Resilience Facility. This is an emergency program that will support micro and small-sized enterprises (MSEs) and start-ups in Ethiopia during the economic downturn caused by the COVID-19 pandemic.

*Alemayehu Konde Koira, Country Head, Ethiopia*

“Young Africa Works is about connecting young people to opportunity, enabling them to build and sustain their livelihoods. To move forward with that agenda, we first have to safeguard the opportunities that already exist but are threatened by COVID-19. We can then build on that foundation,” said Alemayehu Konde Koira, Country Head, Ethiopia, at the Mastercard Foundation, in a press release.

Here Is What You Need To Know

The program, with an initial commitment of approximately USD 24.8 million from the Mastercard Foundation COVID-19 Recovery and Resilience Program , will ensure MSEs remain solvent, retain their employees, and are able to create increasingly innovative work opportunities in the wake of COVID-19.
The implementation and monitoring of the Mastercard Foundation MSE’s Resilience Facility will be undertaken collaboratively by the three organizations. The provision of financial assistance, in the form of grants and soft loans, via participating institutions — Banks, Microfinance, and Business Development Services — to eligible, qualified micro- and small-sized enterprises, both formal and informal.

The amount and type of financial support provided will vary depending on the size of enterprise and their needs and will focus on supporting MSEs and start-ups within the following two categories:

High Vulnerability: Registered micro enterprises and informal firms that are self-employed.
Moderate Vulnerability: Small enterprises facing extreme slowdown within service-related businesses and that are at risk of major interruption or cancellation of orders.

The program, to be implemented in Addis Ababa, is anticipated to:

Prevent 24,000 MSEs from going bankrupt and closing permanently.
Prevent more than 50,000 employees from losing their jobs.
Equip three financial institutions to effectively partner with MSEs through collateral free loans and increase their adoption rate of digitally based micro credit.

The creation of the Mastercard Foundation MSE’s Resilience Facility is aligned to the Foundation’s Young Africa Works strategy. Young Africa Works, developed in consultation with young people, policymakers, educators, and entrepreneurs, is Mastercard Foundation’s strategy that aims to enable 30 million young people in Africa, with 10 million in Ethiopia, to access dignified and fulfilling work over the next 10 years.

“This intervention, by filling the critical gap needed to serve MSEs, will significantly enhance the government’s proactive measures to avert the impact of the pandemic and keep enterprises solvent and in business. The Jobs Creation Commission estimates that close to 1.4 million wage jobs are under threat and approximately 1.9 million people in vulnerable employment will lose their income due to the economic impact of COVID-19. Enterprises and informal businesses, that are least able to withstand this economic slowdown, will bear the brunt of these losses. The least served and vulnerable young people in our country will be impacted,” said Jobs Creation Commission Commissioner, Dr. Ephrem T Lamango.

How And When Can Startups Begin Pitching?

According to the press release, once participating institutions have been onboarded, the Jobs Creation Commission and First Consult, a leading consulting firm specialising in the design and delivery of interventions that support private sector advancement and the overall economic development of Ethiopia, will put out a call to MSEs and startups to apply for funding, which will be announced soon.

For media enquiries, please contact:

Jobs Creation Commission

Tewedaj Eshetu, Communications and PR Advisor
Telephone: +251 116 671792
Email: tewedaj.dadi@jobscommission.gov.et

Mastercard Foundation

Helen White, Strategy Lead, Program Communications
Telephone: +27 76 166 5372
Email: hwhite@mastercardfdn.org

First Consult

Eden Mesfin, Communications Lead
Telephone: +251 114 401 473
Email: emesfin@firstconsultet.com

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.

Ethiopia Launches Its First Satellite Into Space

December 21, 2019

China has helped Ethiopia to launch its first-ever satellite into space. This a deal breaker for the country as the earth observatory satellite is designed to help the East African nation gather data for agricultural, mining and environmental protection.

“Ethiopia has joined the effort to seek knowledge and information from space,” Prime Minister Abiy Ahmed, said in a congratulatory message to Ethiopians.

Here Is All You Need To Know

Although this is the first major effort by Ethiopia, Prime Minister Abiy said the country would send up more satellites in collaboration with other countries, without giving details.

“This is a day we became one of the 70 countries in the world that operate a satellite from space,” said Ahmedin Mohammed, an official with Ethiopia’s Innovation and Technology Ministry. “The next step is to launch a communication satellite and also set up a space materials assembly and manufacturing facility here in Ethiopia.”

AFP reports that Ethiopian space officials stated both Ethiopian and Chinese engineers took part in the construction of the 72 kilogram (159 pound) satellite that took three years.
The actual cost of the satellite was $8 million, of which $6 million was covered by China, said Ethiopian officials.
By this launch, Ethiopia hopes to save up to $11 million a year by using their own satellite data.
The satellite was sent into space from Shanxi Province in China. Ethiopian and Chinese officials monitored the launch from a command and control center set up in the outskirts of the capital Addis Ababa. They watched a video stream from China.
Ethiopia’s Prime Minister Abiy Ahmed is credited with starting the satellite program three years ago while he was Minister for Technology.

A Look At The African Satellite Space

Only about ten countries, including Ethiopia have been able to shoot satellites into the space. Nigeria has already launched four satellites into space, with three still operational and one deorbited after completing its objectives. The country’s first earth observation satellite, NigeriaSat-1, was launched in September 2003. Launched by Kosmos-3M rocket from Russian Plesetsk spaceport, it cost the country $30 million. That was followed by the launch of Africa’s first communications satellite, NigComSat-1, built and launched in China in 2007. Other African countries in the satellite space include South Africa which in December 2018, launched the continent’s most advanced nanosatellite into space to monitor and manage disasters such as fires and assist the ocean economy. South Africa’s first was the TshepisoSat, which was launched in 2013, according to theSAASTA.

Angola’s first satellite was launched in December 2017 but declared defunct by Russia four months later. Ghana’s first satellite was launched into orbit in 2017 from the International Space Station. In February 2019 the EgyptSat-A high-resolution earth observation satellite was launched into space by Egypt.

In May 2018, Kenya launched its first satellite into orbit. One of the most active African countries in space technology, Algeria has six satellites in orbit. The most recent launch was in 2017 when the Algerian Space Agency launched a telecoms satellite into space in cooperation with China.

In late 2018, Morocco launched its second surveillance satellite, the Mohammed VI-B, from the spaceport in French Guiana in cooperation with French company Arianespace.

Working with a U.K.-based company OneWeb, Rwanda launched, in February 2019, Icyerekezo, the first-ever satellite that connects remote schools to the internet, according to Face2FaceAfrica.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Ethiopia secures $3 Billion Development fund from the World Bank

December 15, 2019

The Ethiopian economy has received a huge boost courtesy of a $3 billion funding from the World Bank aimed at strengthening structural imbalances, and macroeconomic growth. It will also help the country to address some underlying factors slowing down its economic growth.

Ethiopian Prime Minister Abiy Ahmed

Ethiopia which has been one of Africa’s fastest growing economies over the last decade has witnessed huge infrastructural development impacting growth and pumping up employment, however, political instability occasioned by protests and violence has slowed down growth in some sectors.

The country’s tourism and hospitality industry which has attracted a lot of attention in recent years has been at the receiving end of the political upheavals which l led to a change of government in the last two years, as expectations have been dampened as a result of the violence.

The government however, has vowed to continue churning out positive growth numbers through structural balancing and strengthening macroeconomic growth.

Speaking on government’s efforts to see growth rebound soonest, the Ethiopian Prime Minister Abiy Ahmed said at the weekend that Ethiopia will receive $3 billion from the World Bank to help strengthen reforms in its traditionally state-controlled economy.

The announcement was made two days after the International Monetary Fund said it had reached a preliminary agreement for a three-year, $2.9 billion financing package to support Ethiopia’s economic reforms.

Abiy did not give more details on the World Bank funding. He said on his Twitter account that unnamed development partners have pledged more than $3 billion in addition to the World Bank and IMF funding.

The money will go toward macroeconomic, structural and sectoral reforms, he said.“This reaffirms both Governments’ and donors’ partnership to transition Ethiopia to a prosperous and peaceful nation,” Abiy tweeted.

The Prime Minister is hell bent on opening up the Ethiopian economy to the private sector which was the core of his promise when he came to power in 2018. Ethiopia is one of the remaining African countries with huge public sector run centrally controlled economy. Sectors like the telecomms and banking are still in government hands. It is expected that the country will open its economy to forein investors in key sectors.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Be Patient, Ethiopia’s Prime Minister Tells Ethnic Groups Calling for Secession

September 16, 2019

The Prime Minister of Ethiopia Mr Abiy Ahmed has urged ethnic groups in in the country demanding for secession to be patient and join him to build the country into a great nation. He made the plea yesterday during a visit to leaders of the Kafficho ethnic group who requested for a new federal state to break away from the Ethiopian federation. Observers say that the growing number of ethnic groups asking for full independence has created an atmosphere of uncertainty further heightening the destabilization of the very diverse southern region. Addressing the people, the Prime Minister said that “you think that there will be many problems in your problems, there are many interrelated and systemic issues that need to be considered.”

It could be recalled that the country’s southern region was rocked by violence two months ago following a similar campaign by the Sidama ethnic group. These ethnic nationalities are keying into the constitutional requirements in Ethiopia’s Constitution mandating the government to organise a referendum for any ethnic group that wants to form a new entity. As at the last count, about 11 groups have submitted such bids in the south.

In another development, opposition political parties in the country have threatened to boycott national elections scheduled for next year if changes to an electoral law they view as biased towards the ruling party are not made. There have been regular parliamentary elections since the Ethiopian People’s Revolutionary Democratic Front (EPRDF) took power in 1991 but, with one exception, none were competitive. One of the key changes the opposition parties pointed out is that one of the amendments raised the number of signatures to register a national party to 10,000, up from 1,500. Regional parties will need 4,000 signatures, up from 750. Aside that, they also complained about the new rule requiring civil servants running for office to take leave without pay.

The current Prime Minister, Abiy Ahmed was appointed last year by the EPRDF after three years of anti-government protests, promising reforms including a credible multi-party poll in 2020. The new reforms some of the political parties say were approved in a rush without addressing their demands being met. They however, say that last month’s changes to the election law in parliament, where the ruling party holds all the seats, made it more difficult for them to actively participate.

Observers say that Ethiopia’s political reforms have been threatened by ethnic rivalries. It could be recalled that violence which erupted in some of the regions could lead to serious delays of the elections as many people were forced to relocate from their communities. Inspite of the political and ethnic tensions, the Prime Minister was quoted as saying that his government will continue to engage the people even as political reforms and freedom for journalists and activists will be a continuous process.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Africa Check in conjunction with Facebook, expands its local language coverage as part of its Third-Party Fact-Checking Programme

August 15, 2019

Africa Check in conjunction with Facebook, expands its local language coverage as part of its Third-Party Fact-Checking Programme.

Facebook’s reality checking project depends on input from the Facebook people group, as one of numerous sign Facebook uses to raise possibly false stories to certainty checkers for survey

Facebook), today with Africa Check reported that it has included new neighborhood language support for a few African dialects as a major aspect of its Third-Party Fact-Checking program – which surveys the exactness of news on Facebook and expects to decrease the spread of deception.

Propelled in 2018 crosswise over five nations in Sub-Saharan Africa, including South Africa, Kenya, Nigeria, Senegal and Cameroon, Facebook has banded together with Africa Check, Africa’s first free certainty checking association, to grow its neighborhood language inclusion over:

Nigeria, in Yoruba and Igbo, adding to Hausa which was at that point bolstered

Swahili in Kenya

Wolof in Senegal

Afrikaans, Zulu, Setswana, Sotho, Northern Sotho and Southern Ndebele in South Africa

As indicated by Kojo Boakye, Facebook Head of Public Policy, Africa, stated: “We keep on trying huge interests in our endeavors to battle the spread of false news on our stage, while building strong, sheltered, educated and comprehensive networks. Our outsider reality checking system is only one of numerous ways we are doing this, and with the extension of neighborhood language inclusion, this will help in further improving the nature of data individuals see on Facebook. We know there is still more to do, and we’re focused on this.”

Remarking, Noko Makgato, official chief of Africa Check, said “We’re excited to grow the munitions stockpile of the dialects we spread in our work on Facebook’s outsider truth checking program. In nations as semantically different as Nigeria, South Africa, Kenya and Senegal, certainty checking in neighborhood dialects is imperative. In addition to the fact that it lets us actuality check increasingly content on Facebook, it likewise implies we’ll be contacting more individuals crosswise over Africa with confirmed, believable data.”

Facebook’s reality checking project depends on criticism from the Facebook people group, as one of numerous sign Facebook uses to raise possibly false stories to certainty checkers for survey. Neighborhood articles will be reality checked close by the confirmation of photographs and recordings. In the event that one of Facebook’s reality checking accomplices distinguishes a story as false, Facebook will demonstrate it lower in News Feed, essentially lessening its dispersion.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Facebook: https://web.facebook.com/Afrikanheroes/

Addis Ababa leads Africa in hotel room rates

August 9, 2019

Addis Ababa, Ethiopia, posted Africa’s highest average daily rate (ADR), according to the most recent 12-month data from STR . The market will play host to the Africa Hotel Investment Forum (AHIF) on 23-25 September at the Sheraton Addis.

From July 2018 through June 2019, Addis Ababa registered an absolute ADR of US$163.79 when measured in constant currency, which removes the effects of inflation. That figure was a 1.1% increase year over year. The next closest STR-defined markets in Africa were Accra Area, Ghana (US$160.34) and Lagos Area, Nigeria (US$132.51).

“Addis Ababa continues to maintain high ADR levels when compared internationally,” said Thomas Emanuel, a director for STR. “The city has multiple demand drivers, such as a growing economy, successful airline and its status as the diplomatic capital for Africa.

Air connections and ease of access compared with other cities also factor in the equation for strong demand, which provides hoteliers with the confidence to maintain rate levels.

“With healthy performance comes to interest in investment. The market’s pipeline is strong with 22 hotels and 4,820 rooms in active development. We will continue to monitor these new openings to see how the market reacts once these additional rooms open.”

Emanuel will present the latest hotel performance and development insights on the Tuesday (24 September) of AHIF.

“Hosting high-profile international meetings like AHIF is one factor that has helped Addis to maintain its position as the city with the most expensive hotel accommodation in Africa,” said Matthew Weihs, Managing Director, Bench Events (AHIF organizer). “Our delegates will be looking carefully to see if the addition of a lot more high-quality accommodation and meeting space will depress room rates or help Addis become even more attractive as a destination.”

Addis Ababa’s occupancy over the same 12-month time period was 58.4%, up 6.5% year over year. Cairo & Giza was the continent’s occupancy leader at 74.5%. Cape Town Centre, South Africa (65.0%), ranked second in the metric followed by Accra Area (59.7%).

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Facebook: https://web.facebook.com/Afrikanheroes/

Foreign Nationals In Ethiopia Can Now Set Up Banks And Insurance Business

July 29, 2019

Ethiopia is on course to liberalize its economy. Apart from opening bids for its first-ever privately owned telecom license, foreigners who are not citizens of Ethiopia may soon get a law that would allow them to set up and run insurance services as well as set up microfinance banks.

Here Is The Deal

Two draft bills that aim to restructure the country’s existing business law governing insurance companies and microfinance institutions have been passed by Ethiopian Council of Ministers.
The bills would definitely scale through and be passed into law since they were developed by the National Bank of Ethiopia and endorsed by the Ethiopian Council of Ministers.
What is just remaining is for the Ethiopian House of People’s Representatives, the Ethiopian parliament’s lower house, to which it had been forwarded to, to put its final ratification on it.
Under the new law, all that is needed, among other things, for a foreigner to set an insurance or microfinance business is for the foreigner to be a foreign national of Ethiopia.
This is part of restructuring Ethiopia’s current laws on insurance and microfinance sectors, according to the Ethiopian PM’s office.

The decisions to amend the East African country’s existing business laws governing insurance companies and microfinance institutions were made in line with recent and ongoing “large-scale” reform measures in the sectors, the Ethiopian Prime Minister’s Office revealed in a statement.

Here Is The Change These New Laws Are Bringing To The Table

Article 656 of the Ethiopian Commercial Code provides that the law shall determine the conditions under which physical persons or business organizations may carry on insurance business.
Recourse is however made to other parts of the commercial code and other laws to find out as to who may undertake insurance business and the conditions under which it may be undertaken in Ethiopia.
Accordingly, Article 513 of the commercial code provides that banks and insurance companies cannot be established as private limited companies, i.e., a private limited company cannot engage in banking, insurance or any other business of similar nature.
Similarly, Article 6(1) of the Licensing and Supervision of Insurance Business Pro No 86/1994 provides that no person may engage in the insurance business of any type unless it applies to and acquires a license from the National Bank of Ethiopia for the particular class or classes of insurance.
Furthermore, Article 4(1) and Art 2(3) of the same proclamation provide that such person has to be a share company as defined under Article 304 of the commercial code.
These requirements/conditions in effect prevent foreigners from engaging in the insurance business and foreign banks from opening branches and operating in Ethiopia.
The most probable reason for this position is the need to protect infant domestic insurance companies which do not have the desired financial strength, know-how, and human resources to be able to compete with foreign banks which have the superior capacity in these areas.
The new laws, therefore, are preparing to change all these.
Under the new law, all that is needed, among other things, for a foreigner to set an insurance or microfinance business is for the foreigner to be a foreign national of Ethiopia.

Freeing Up The Economy

Ethiopia has also recently announced that government would no longer be monopolizing its telecom sector. At the moment, there is no MTN, Airtel, Safaricom, Vodafone or any other mobile telecom operator in the East African country of Ethiopia, but that will no longer be the case before this year ends. The country is set to award its first set of telco licenses to multinational mobile companies by the end of 2019.

Before this happens, Ethiopia’s government has continually monopolized the country’s telecom industry. Hence, this is expected to end a state-wide monopoly and open up one of the world’s last major closed telecoms markets.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Ethiopia backs Africa Hotel Investment Forum (AHIF)

July 26, 2019

Prominent figures from Ethiopia’s public and private sectors have spoken out publicly to welcome the return to Addis Ababa of the Africa Hotel Investment Forum (AHIF) which is the premier tourism and hotel investment conference in Africa, and to encourage others to attend.

AHIF attracts many prominent international hotel owners, investors, financiers, management companies and their advisers. It will return to the Sheraton Hotel, Addis Ababa in the last week of September 23-25, 2019. AHIF was previously held in Ethiopia’s capital city in 2014 and 2015.

According to an independent study by Grant Thornton and the international tourism advisory expert, Martin Jansen van Vuuren, of Futureneer Advisors, the event is forecast to be worth $millions to Ethiopia’s economy and to facilitate the investment of $billions in hospitality projects across Africa.

In 2018, AHIF facilitated around $2.8 billion of investment in the hospitality sector and between 2011 and 2018, $6.2 billion. Abebe Abebayehu, Commissioner, Ethiopian Investment Commission, said: “We are glad to support this prestigious event.

AHIF attracts the highest caliber group of business leaders in the hospitality industry in Africa. By taking part, we will be able to get a much deeper understanding of what investors need. That is particularly important to us in the context of the government’s focus on tourism as a strategic pillar of the economy. By encouraging more investment in hospitality projects, we will create productive employment for our young population and earn valuable hard currency.”

One of the most important roles played by AHIF is to facilitate networking between delegates. Many investors and developers are keen to find new sources of finance, expert advisers and importantly, local partners.

One Ethiopian businessman, Neway Berhanu, Managing Director, Calibra Hospitality Group, has benefitted substantially from this. He says: “Calibra Hospitality Group’s success in becoming the leading consulting company in Ethiopia has been greatly helped by being an active participant in the Africa Hotel Investment Forum, since 2011.

Thanks to Bench Events, we are now well connected, having established very good relationships with all the major international hotel brands. That has enabled us to conclude close to 25 International transactions, bringing business to Ethiopia. I would encourage the business community and all stakeholders in the hospitality sector to attend.”

The promotion of tourism is another critical issue for many African countries. For Ethiopia, it is underlined by a report from the World Travel & Tourism Council (WTTC), which states that Travel & Tourism represents 61% of Ethiopia’s exports and it expects the industry to expand by a whopping 48.6% in 2019.

A rapidly growing national airline, a new hub airport, relaxed visa regulations, and the country being the political center of Africa, by virtue of hosting the headquarters of the African Union, are drivers of these impressive numbers. Ms. Lensa Mekonnen, CEO, Tourism Ethiopia said: “AHIF will provide an excellent opportunity to welcome the cream of the hotel industry to Ethiopia.

Our aim is to show them our assets and thereby attract more international-standard hotel and resort brands to establish themselves close to our historical, natural and cultural sites, in addition to the capital city. By promoting regionally balanced development, we will attract more tourists to Ethiopia and encourage them to stay longer.”

Matthew Weihs, Managing Director, Bench Events, concluded: “Ethiopia is a center for political meetings in Africa and a fast-growing transport hub. That already makes it attractive to hotel investors. The government’s declared interest in prioritizing tourism will further increase the attractiveness, along with its renewed enthusiasm for collaboration with the business community.

When AHIF first came to Ethiopia, there were three internationally-branded Hotels, the Hilton, the Radisson, and the Sheraton. Now there is a Best Western, a Golden Tulip, a Hyatt Regency, Marriott apartments and a Ramada; plus, another 27 hotels in the pipeline!”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.