Nigeria Set To Choose Ethiopian Airlines As Core Investor Of New Flag Carrier

Nigeria Set To Choose Ethiopian Airlines As Core Investor Of New Flag Carrier Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently. Ready to take off? According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business. Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG. According to one source close to the Ministry of Aviation, Ethiopian was the only airline that bid to lead the new flag carrier. Despite that, the choice was likely a good one, adding that, “Ethiopian Airlines has the equipment needed for the start-up of the new national carrier, Nigeria Air. It has many Bombardier Dash 8 aircraft, which would be the equipment that would be deployed with additional deployment of few Boeing B737 NG aircraft. The airline is most prepared to support the Nigerian government actualise its national carrier ambition.” Finally happening Nigeria Air was first announced in the summer of 2018 at the Farnborough Air Show but suspended a few months later in November. Fast forward four years, and the carrier was once again on the radar, with several players, including Qatar Airways, rumored to run the new operation. In June, the airline received its Air Transport License (ATL) from the Nigerian Civil Aviation Authority (NCAA), a precursor to the all-important Air Operators Certification (AOC). The next step was finding a partner to run the airline, which is now reportedly completed with Ethiopian Airlines’ appointment.

TPLF announced a separate ceasefire

TPLF announced a separate ceasefire The Government of Tigray’s Stance on a Peaceful Resolution of the Current Conflict Today, September 11, 2022, Ethiopians in and outside the country are celebrating the advent of the New Year. It is the Government of Tigray’s solemn desire to see Ethiopians in general and the people of Tigray in particular to no longer hear the sound of gunfire, the blockade of essential services and humanitarian aid, and associated pain and suffering. To that end, the Government of Tigray is prepared to participate in a robust peace process under the auspices of the African Union (AU). Furthermore, we are ready to abide by an immediate and mutually agreed cessation of hostilities in order to create a conducive atmosphere. Indeed, the Goverment of Tigray has repeatedly called for, and worked towards, the peaceful resolution of the current conflict. The Government of Tigray’s prior unilateral compliance with the cessation of hostilities is a case in point. We expect a credible AU-led peace process. This peace process will also include mutually acceptable mediators; international observers who will help the parties build mutual trust, instill confidence in the peace process, and support and oversee the implementation of commitments; and international experts to provide necessary guidance and advice on the integrity of the peace process. We are convinced that only through peaceful dialogue can we achieve a lasting solution to this tragic conflict. Following a cessation of hostilities, the next step is to finalize a comprehensive negotiated ceasefire, and an all-inclusive political dialogue to resolve issues underlying the current conflict. The Government of Tigray has set up a negotiation team ready to be deployed without delay. This team, which includes Getachew Reda and Gen. Tsadkan Gebretinsae has already been given the mandate to represent the Government of Tigray in future negotiations. In the spirit of our New Year and a fresh start, let us end the fighting, give peace a chance and start on a path towards peace and prosperity.

Council of Ministers approved the opening up of the banking sector to foreign investors

Council of Ministers approved the opening up of the banking sector to foreign investors The draft policy that was proposed to councils of ministers lifts the restriction of the opening up of the banking sector to foreign investors. Which is aimed at supporting the services of the sector with knowledge and technology, moving the country’s economy to a higher level, to increase the competitiveness, effectiveness, and efficiency of the financial sector.

The first research document that informs the amount of reserves of natural gas and crude oil in Ethiopia has been released

The first research document that informs the amount of reserves of natural gas and crude oil in Ethiopia has been released The first research document that informs the amount of reserves of natural gas and crude oil in Ethiopia has been released The first scientific study that informs the actual amount of crude oil and natural gas reserves in Ethiopia and suggests how to extract them has been released. Ministry of Mines Engineer Takele Uma said that the study was conducted for four months. It is stated that the American company “Netherlands Seawell and Associates” conducted the study. A document containing the amount of natural gas in the country and its economic viability was handed over to the ministry today. At the handing over of the document, Engineer Takele Uma pointed out that in the past, only oil and natural gas reserves existed. Still, the amount was not known, so the resource data were manipulated by various companies. Therefore, he said, this technology solves this problem and creates accountability, making it the first in the history of Ethiopia. He said the document we received today is a step forward in our national plan to develop natural gas and crude oil. This document is a certificate of verification of Ethiopia’s natural gas volume and economic viability. They said that it would also enhance the government’s bargaining power. I believe it will be a good warning to those who are holding our wealth captive with false information, the minister said, thanking everyone who participated in the work. He pointed out that work is being done to convert the document into action, and said that the issue of its conversion into action will be determined by the speed of our work. 1 COMMENT Ittu Aba Farda August 27, 2022 At 11:24 pm This news of huge untapped reserves natural gas and crude oil has been around going back to my school days in the 1960’s but nothing has come out to fruition. It was discovered during the late emperor’s days but it was forced to be moth balled due to security reasons. Watch now this Ethiopia hater bigot and former member/fanatic supporter of WSLF moaning and daydreaming about his own ‘republic’ fiefdom there. But first he is looking for some lackeys from among my Oromos to re-incarnate his late uncle Ziad Barre’s creation of Somali Abbo Front. You watch him ‘planning’ his grand scheme sitting by the beach there. This news of huge untapped reserves natural gas and crude oil has been around going back to my school days in the 1960’s but nothing has come out to fruition. It was discovered during the late emperor’s days but it was forced to be moth balled due to security reasons. Watch now this Ethiopia hater bigot and former member/fanatic supporter of WSLF moaning and daydreaming about his own ‘republic’ fiefdom there. But first he is looking for some lackeys from among my Oromos to re-incarnate his late uncle Ziad Barre’s creation of Somali Abbo Front. You watch him ‘planning’ his grand scheme sitting by the beach there. Comments are closed.

Ethiopia expects IMF visit in September – Finance Minister official

Ethiopia expects IMF visit in September – Finance Minister official LONDON (Reuters) – Ethiopia expects an IMF mission to visit in September, following a visit by the Fund three months ago, a finance ministry official said on Tuesday, noting that an IMF program was necessary to restructure its debt. Ethiopia expects an IMF mission to visit in September, following a visit by the Fund three months ago, a finance ministry official said on Tuesday, noting that an IMF program was necessary to restructure its debt. Ethiopia’s bilateral creditors, co-chaired by France and China, first met in September 2021 but progress on debt relief has been complicated by a 21-month civil war that began in the northern Tigray region. The bilateral creditor discussions, held under the G20’s Common Framework debt restructuring process, were “stellar” but the newness of the process had contributed to delays, Brook Taye, a senior adviser at Ethiopia’s ministry of finance, said at a virtual event hosted by the African Development Bank. Tags imf

Chinese companies to develop new industrial park in Ethiopia

Chinese companies to develop new industrial park in Ethiopia ADDIS ABABA, Aug. 11 (Xinhua) — The Ethiopian Investment Commission (EIC) on Wednesday signed an agreement with China’s WODA Metal Industry Private Limited Company (PLC) and its partners to build an industrial park in Ethiopia. The agreement involves the upgrading of the WODA Metal Industry PLC into WODA Industrial Park with an outlay of 95 million U.S. dollars at Sebeta town on the outskirts of the Ethiopian capital Addis Ababa. Daniel Teressa, EIC Deputy Commissioner, told Xinhua after the agreement signing ceremony that WODA Industrial Park will have a significant contribution in terms of creating job opportunities, upgrading the industrial foundation and generating the much needed foreign currency to the east African nation. “It is a huge investment that will create a lot of job opportunities and provide a big boost to the country’s export earnings and import substitutions,” said Teressa, adding that the industrial park will also serve as a platform to transfer technology to locals. The industrial park to be jointly developed after the end of Ethiopia’s current rainy season by two Chinese companies – WODA Metal Industry PLC, Diyuan Ceramics PLC and a Japanese firm called Alpha, is expected to create up to 17,000 job opportunities for local people, according to the EIC. Noting that the park developers have been investing in Ethiopia for a long time with rich business experiences and networks in the eastern African market, the deputy commissioner said the new investment is anticipated to attract at least 400 million U.S. dollars of investment. When it gets fully operational, WODA Industrial Park is set to manufacture electric vehicles, rubber, home appliances and power equipment and supply them to the Ethiopian and east African market. “In the near future, we are going to manufacture high-end products, chiefly electric vehicles, home appliances, rubber and electric batteries,” Cui Xiguang, founder of WODA Industrial Park and general manager of WODA Metal Industry PLC, which is engaged in the building of power transmission towers, structures and manufacturing of cables and galvanized products. Cui is optimistic that the electric vehicle assembly business would be lucrative as the auto industry in the eastern African region is at its infancy stage and that the government of Ethiopia supports the development of electric vehicles through its preferential policies. “We will be focusing not only on the Ethiopian market but also the whole eastern African market. There is a big population and a big market,” Cui added. Official reports indicate that Ethiopia relies heavily on imports of tires and power distribution equipment, in which the WODA Industrial Park, once operational, is expected to help Ethiopia get the products locally through recycling of waste tires using new technology.

Ethiopia completes third round water filling of the Great Ethiopian Renaissance Dam

Ethiopia completes third round water filling of the Great Ethiopian Renaissance Dam It has been announced that the third round of water filling of the Great Ethiopian Renaissance Dam has been completed and water has started to flow on top of the dam. Following the completion of the 3rd round of water filling of the dam, senior government officials including Prime Minister Abiy Ahmed and Deputy Prime Minister Demeke Mekonen were present at the site. It is recalled that the first and second water filling of the dam took place in the last two winters. The completion of the 3rd round of water filling of the dam was announced yesterday, August 5/2014. It is after the announcement that the second power generation turbine has started working. The dam’s 2nd turbine, Unit 9, which started generating power yesterday, is said to have the capacity to generate 270 megawatts of electricity. August 2022 The commissioned unit 10 turbine with a capacity of 270 megawatts. According to this, the two turbines have a total capacity of generating 540 megawatts of electricity. The dam’s construction manager, Engineer Kefle Horo, said that 95 percent of the construction of the dam’s civil works has been completed. They stated that construction and installation of electromechanical works increased to 61 percent and water transmission metal works reached 73 percent. The general manager said that the total construction work of the dam has reached 83.3 percent in his speech at a ceremony held to start the power generation of the dam’s second power generation turbine. When the construction is completed, the Renaissance Dam is expected to be the largest electricity-generating dam in Africa, with a height of 145 meters. Its length is 1.8 kilometers. The Great Renaissance Dam, which is said to generate more than five thousand megawatts of electricity at a cost of more than five billion dollars, is expected to supply electricity to neighboring countries beyond Ethiopia. The foundation stone of the construction was laid on April 2, 2003. The Great Ethiopian Renaissance Dam is being built in Guba District, Benishangul Gumuz Region, where Ethiopia borders Sudan to the west. Tags GERD Great Ethiopian Renaissance Dam

Impact of the Russia-Ukraine war on Ethiopia

Impact of the Russia-Ukraine war on Ethiopia By- Seneshaw Tamru and Tewodros Makonnen Gebrewolde The conflict in Ukraine and the subsequent sanctions against Russia triggered price increases of key commodities with far-reaching impacts on welfare, production, and economic growth for developing countries, including Ethiopia. Economic sanctions were imposed on Russia by the US and EU to deter Russia from further escalating the war with Ukraine. The ongoing conflict has caused severe supply disruptions, resulting in sharp price increases for commodities of which Russia and Ukraine are large global suppliers as well as their close substitutes. Prices of essential commodities like grain, petroleum, and fertiliser have consequently surged significantly. This, in turn, can severely affect welfare in terms of higher food and energy prices and can also undermine productive capacity as essential inputs for agricultural and non-agricultural production become more expensive. To estimate the extent of the impact, we simulate the impact of price increases for key commodities on production, employment, and household welfare in Ethiopia. Rising prices of key commodities and imports Ethiopia, along with the rest of the world, experienced a sharp rise in prices of key commodities with the onset of the war in Ukraine (figure 1). The 12-month moving average price of crude brent petroleum in June 2022 increased by 64% from June 2021 while the price of wheat increased by 48%, with edible oil prices increasing by roughly 49% in the same period. Similarly, given that Russia is the biggest exporter of nitrogen-based fertiliser, the second and third most important global supplier of potassium and phosphate respectively, the Russia-Ukraine war has impeded supply and led to global increases in their prices. Figure 1 Note: From January 2022 (before the onset of the war) to June 2022 (about four months after the war started), petroleum, wheat, and fertiliser prices rose by 21.6%, 22.1%, and 29% (source: Indexmundi.com). Such significant global commodity price shocks especially affect developing countries that are net food and oil importers. Ethiopia, for instance (as of 2021), imports close to US$ 3 billion worth of petroleum products, accounting for a fifth of total merchandise imports and equivalent in monetary value to the country’s total merchandise exports. The country also imports close to US$ 2 billion worth of fertilisers, accounting for almost the entire domestic supply of this commodity. Wheat imports total around US$ 400 million per year (depending on exchange rate and purchase price) and account for about a quarter of total domestic consumption of this product. Additional imports of significance are metal and edible oils. In total, the monetary import value of these commodities accounts for a third of total merchandise imports and is equivalent to twice the value of Ethiopia’s merchandise exports. This shows how significant these commodities are to the balance of payments and the strain price increases would cause on agricultural production and food consumption. Persistent global price increases may lead to either further balance of payments deficits or a decline in essential commodity imports for the next fiscal year. The timing of this shock is further exacerbating, as even though Ethiopia was on the path to recovery from COVID-19, it was simultaneously reeling under the effect of an internal conflict in its northern and western parts since November 2020. Simulating the impact of the war on key economic sectors and commodities On top of the direct impact on the import bill, the crisis also affects production and consumption. We use a Computable General Equilibrium (CGE) model to simulate the effects on production and consumption employing a recursive Dynamic Stochastic Computable General Equilibrium (DSCGE) model developed by the International Food Policy Research Institute (IFPRI). For our analysis, we simulate the direct and indirect effects of the Russia-Ukraine war on the Ethiopian economy as a shock from increased international prices for five key import items/groups (wheat, edible oil, metal and metal products, fertiliser, and petroleum) relative to a pre-war shock. To do so, we set up two simulation scenarios. The first is a business-as-usual (BAU) reference scenario using the growth rate of the last two years before the Ukrainian crisis. This scenario implicitly contains the impact of COVID-19 and other natural and human-made crises during the period. The second scenario is the Russia-Ukraine war induced global shock scenario that reflects current global prices of the five import item groups considered in the analysis. The overall findings, hence, compare the Russia-Ukraine war shock scenario with the BAU scenario. Services sector would be most affected by higher input prices From the simulation, petroleum prices would increase by 86% compared to their value in 2021-22. Similarly, prices of wheat, edible oil, DAP fertilizer, and metal products would increase by 100%, 11%, 108%, and 82% respectively. Figure 2 below portrays the potential impacts on the major economic sectors – agriculture, industry, and services. Results show that the services sector would be the hardest hit amid the ongoing Russia-Ukraine crisis followed by the agriculture sector. The services sector is the prime user of fuel through transport services and this has considerable implications for other sectors like wholesale and retail trading. The services sector is also negatively affected by the real-estate sub-sector that could be impacted by the higher prices of metal and metal products. The effect on agriculture could be through a direct fertilizer price increment or an indirect price effect through higher transportation costs (fuel). The industry sector would be moderately affected probably through a direct impact on construction materials like metal and metal products. Figure 2 Note: The services sector would experience the largest impact (-10%) from the war (source: authors’ estimates from CGE modelling) Rural poor households would be the worst hit For the income distribution impact of the price shocks, the rich and middle-income groups in both urban and rural areas would generally be more negatively affected by the crisis. The rural rich and middle-income households are potentially partially compensated by the increased prices of the agricultural goods they produce but not sufficiently. This could be due to a strong cross-price elasticity between wheat and the other major cereals (for example, maize, teff, sorghum) which show similar price changes. While the urban rich households see the largest decrease in incomes, the rural poor suffer more than their urban counterparts as they have lower levels of savings and less capacity to absorb price increases, since their basic necessities take up a larger share of their household budget. Figure 3 Note: The ‘urban rich’ would experience the largest reduction in income (-26.8%), while incomes of the ‘urban poor’ would be least affected (-4.2%). The ‘rural poor’ would also be more negatively affected than their urban counterparts owing to their smaller savings and lesser ability to absorb price increases (source: authors’ estimates from CGE modeling). Falling GDP and the employment rate for unskilled labor Figure 4 below shows the effect of the shock on the overall economy proxied by GDP which would fall by as much as 7.6% as compared to the BAU scenario. Given the contribution of the services and agriculture sectors to the overall economy in Ethiopia, it is not surprising that the effect on the overall economy is driven by the proportionally large negative impact on the services and agriculture sectors. For example, in 2021, the two sectors together accounted for more than 72% of the GDP: services (39.6%) and agriculture (32.5%). The figure also looks at employment changes for unskilled labor that, according to the latest Ethiopian Social Accounting Matrix (SAM), account for about 78% of the labor force. In line with the considerably larger proportion of unskilled labor in the overall labor force, it is likely that the bulk of adjustment falls on the unskilled labor in the severely affected sectors-i.e., services and agriculture. Accordingly, as portrayed in the figure, the magnitude of employment loss would be significant at about 18%, therefore necessitating the consideration of mitigation measures. Figure 4 Note: The negative impact on GDP could exceed 7%, while impacts on unskilled employment would be disproportionately large (source: authors’ estimates from CGE modelling) Mitigating the impacts of global commodity shocks The global shocks resulting from the Russia-Ukraine war will have severe consequences. Keeping in mind the magnitude of the shock and the fact that Ethiopia has no market power to affect prices, Ethiopia cannot be insulated from global commodity shocks. However, there are potential measures that can be taken to reduce the negative impacts of the shock and identify opportunities to use the crisis to expand other exports and stimulate domestic production through import substitution. Targeted lifting of fuel subsidies In light of the rising import costs, efficient use of imported commodities like fuel will have to be encouraged. The fuel subsidy for all fuel users was fiscally challenging, prompting the government to lift the subsidy starting July 2022. The removal of the subsidy is expected to raise all transportation costs with ripple effects throughout the economy. The government has, however, already started the commendable process of differentiated subsidies targeting only vehicles that provide public transport services. For energy more broadly, Ethiopia’s heavy reliance on hydropower would mute the impact of the oil price shock. In fact, the shock may further whet the appetite of other countries in the region to tap into Ethiopia’s hydropower potential. Potential for import substitution and increased local production Fertilizer: A similar measure would be to replace imported nitrogen-based fertilizers with local substitutes like animal waste and compost. The government has already started encouraging farmers and households to prepare compost from the waste of vegetables and fruits. It is also important to secure supply commitments given the cut-offs from Ukraine and Russia. Again, the government was successful in renegotiating a major fertilizer contract, albeit with likely reductions in imported fertilizer. Edible oils: While the major cooking oil consumed by Ethiopians, particularly the poor is palm oil, there is scope for substitution for domestic production and further work on this sub-sector is forthcoming. More generally, the implicit pressure on imports of other commodities including processed food could present an opportunity to reenergize domestic agro-processing capacity servicing the middle- and higher-income urban consumers. This would help reinforce reforms anticipated under the emerging revised industrial policy. Metals: The major use of imports is construction. The shock in prices will likely negatively affect development projects by increasing their overall cost. This would require phasing of development projects to focus on the completion of the highest priority ones. Opportunities for commodity export growth Most of the attention has rightly focused on key imported commodities. However, at the same time, the Ukraine-Russia crisis may also open up opportunities for exports of commodities that have been cut off from Russia and Ukraine’s supplies and where Ethiopia can position itself as an alternative supplier. One such example may be gold and other minerals for which Russia and Ukraine are also important global suppliers. For instance, amid recent reforms like the raising of the gold price premium from 29% to 35% in addition to a reduction (from 500 grams to 50 grams) in the requisite quantity to access this premium, gold exports have increased substantially. Gold is now Ethiopia’s most important export commodity. In addition, there has recently been increased momentum to exploit Ethiopia’s iron ore. Nonetheless, despite best efforts at macroeconomic management, the shocks will take their toll in the short- to medium-term and feed into domestic inflation more widely. The poor will be particularly vulnerable, even if the percentage impact on their incomes is lower than that of middle- and high-income groups. It will, therefore, be critical to assess targeted subsidies (such as certain types of cooking oil and transport) as well as leverage the existing rural and urban safety net programs to help them weather the crisis.

New Ethiopian Airlines chief aims for near-doubling of fleet under 2035 roadmap

New Ethiopian Airlines chief aims for near-doubling of fleet under 2035 roadmap Recently appointed Ethiopian Airlines chief executive Mesfin Tasew has embraced the ‘Vision 2035’ roadmap introduced by his predecessor Tewolde GebreMariam in 2019, as he aims to keep the carrier on an aggressive growth path. Speaking during July’s Farnborough air show, Tasew says the roadmap is “tailored around fast, profitable, sustainable growth” and will involve a near-doubling of the carrier’s current fleet – covering both passenger and cargo aircraft. “Today, Ethiopian Airlines operates around 135 aircraft and by 2035 we would like to expand this fleet to more than 250 aircraft,” he states. The Addis Ababa-based operator has 35 aircraft on order, meaning it will need to place significant orders for “more latest-technology, highly efficient aircraft” in the coming years, Tasew says. The currently on-order aircraft include 22 Boeing 737 Max jets – Ethiopian having finally brought its four examples back into service earlier this year. By early August, it had taken delivery of three further Max aircraft, bringing its fleet to seven, and it expects to receive the remaining 22 over the next four years, Tasew states. “When we reintroduced them, customers did not notice that they were flying on the 737 Max,” Tasew says of the passenger response to the type returning following the fatal crash of an Ethiopian example in 2019. “The reliability of the aircraft has been very good,” he adds of the type’s few months back in service. Of Ethiopian’s other outstanding aircraft orders, four of six Airbus A350s have now been upgraded from the -900 to -1000 variant, while it also has two Boeing 787-9s to come, and five 777 freighters. Indeed, freighters are big part of Tasew’s thinking as he adopts a “grand cargo expansion” strategy as part of the 2035 roadmap. In August, Tasew says, Ethiopian will be adding its first Boeing 767-300 freighter, which it has converted at its own facility, augmenting a cargo fleet that currently features nine 777Fs and four converted 737 freighters. “We plan to convert two more 767 aircraft and add them to our cargo operation,” he states. At Farnborough, meanwhile, Ethiopian signed a tentative agreement to purchase two Dash 8-400 freighter conversion kits from De Havilland Canada, while Tasew says Ethiopian “plans to acquire more 737 freighter aircraft”. It is also weighing up its options regarding larger freighters. Despite signing a memorandum of understanding for five Boeing 777-8 freighters in March, Tasew says the carrier is still “evaluating new-generation cargo aircraft, particularly the 777X freighter in comparison with the A350 freighter”. Beyond fleet investments, Ethiopian’s Vision 2035 strategy also involves “investments in infrastructure in the areas of MRO and airport facilities”, Tasew says, noting that Ethiopian manages its own Addis Ababa hub. Furthermore, “we will have major development strategies in the areas of human resource and systems”, he says, adding that Ethiopian “recently added sustainability as part of our pillars to support our growth”. Equity partnerships will also continue to be important, Tasew says, “We would like to assist small African airlines to develop and to grow,” he states, citing the carrier’s recently announced tie-up with the government of the Democratic Republic of Congo to launch Air Congo, in which it will hold a 49% stake. Aside from that April announcement, Ethiopian also has a stake in the recently launched Zambia Airways and a longer-standing interest in Malawi Airlines. But Togo-based ASKY Airlines remains the largest airline in which Ethiopian has an equity interest. Leading that carrier was Tasew’s previous job – and it is a business he is particularly proud of. “This airline has been growing to become… the biggest airline in west and central Africa,” he says. “Even last year, in 2021, it made a remarkable profit when most of the industry was making heavy losses.” Tags ethiopian airlines ethiopian airlines china