Tadias Magazine

Tadias Magazine

By Tadias Staff

Updated: May 12th, 2023

New York (TADIAS) — In a significant development, Ethiopia has granted a mobile money license to Safaricom’s M-Pesa, making it the first foreign player to gain entry into the country’s digital finance market.

The license approval is expected to provide millions of unbanked Ethiopians with access to various mobile banking services such as mobile wallet, internal banking, and card banking.

The move is seen as a significant boost for both the National Bank of Ethiopia (NBE), which issued the license, and M-Pesa, which gets immediate access to one of the largest untapped telecom markets in Africa.

According to NBE, this decision aligns with its goal of “fostering financial innovation and inclusion in the Ethiopian market.”

Despite Safaricom’s M-Pesa reporting a net loss of Sh21.7 billion, the company anticipates breaking even in its fourth year of operation in Ethiopia.

The service is expected to roll out before the end of the year, signaling the start of a new era for digital finance in Ethiopia.

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Tadias Celebrates 20th anniversary: Learn more and support our book project.

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Tadias Magazine

Updated: May 2nd, 2023

New York (TADIAS) — Ethiopian Airlines is all set to commence its new service connecting Atlanta with Addis Ababa this month.

The airline, which is the biggest in Africa and already operates over 130 international passenger and cargo destinations, has announced that it will provide four flights per week on the new U.S. route starting May 16th.

According to Ethiopian Airlines Group CEO Mesfin Tasew, the new service will boost tourism, investment, and socio-economic ties between the two regions. Atlanta will become the airline’s latest passenger destination in the United States, joining the ranks of Chicago, Newark, New York, and Washington.

Atlanta Mayor Andre Dickens welcomed the move, calling the new connection a “win for our City” and expressing optimism about a successful partnership with Ethiopian Airlines.

The General Manager of the Hartsfield-Jackson Atlanta International Airport Balram “B” Bheodari added: “We are thrilled to welcome Ethiopian Airlines to ATL.” (Photo: @flyethiopian)

Ethiopian Airlines is the fastest growing Airline in Africa. (Photo: @flyethiopian)

“We are truly delighted to open our sixth gateway in North America with the new flight to Atlanta,” said Ethiopian CEO Mesfin Tasew, “We have been connecting the U.S. and Africa for 25 years now, and the new service will help boost investment, tourism, diplomatic, and socioeconomic bonds between the two regions. As a pan-African carrier, we are committed to further expanding our global network and connecting Africa with the rest of the world. We are also keen to better serve the U.S. by increasing our destinations and flight frequencies.”

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The Spruce

Updated: April 5th, 2023

Hana Getachew turned her passion for home textiles that were both vibrant and meaningful into a home decor brand, Bolé Road Textiles. Getachew combines her own style of sketching and knowledge of fine arts with the traditional motifs from her home country of Ethiopia to create her one-of-a-kind home decor collections. Each collection is curated through a process of playing with different color schemes and thoughtful motifs.

In collaboration with her local group of skilled artisans in Ethiopia, they bring Getachew’s designs to life using ancient weaving traditions. Each individual product is handwoven one by one, making it as unique and personal as it can be.

What’s the Story Behind Bolé Road Textiles?

Hana Getachew: I worked in commercial interiors for ten years, it was a career I loved. However, I was curious about what it would be like to carve a path of my own based on my background and interests. It was a huge leap of faith but I’ve always enjoyed sharing my culture, now it’s part of what I do!

Where Did the Name Bolé Road Textiles Originate From?

HG: I was born in Ethiopia, and I lived in a neighborhood called Bole (no accent but pronounced the same). Bole Road was a main street that connected our neighborhood to the rest of Addis Ababa.

(Courtesy of Bolé Road Textiles)

What Kind of Cultural Impact Do Your Products Have?

HG: I hope our textiles could be a conduit for cultural connection. I love telling stories of Ethiopia through our collections and I love that our clients get to share that and have a little piece of Ethiopian tradition in their homes.

What’s the Creative Process of Making Designs?

HG: I focus each collection around a concept or idea inspired by Ethiopia. Sometimes it’s about a particular region, as with the Heritage, Konso, and Harar Collections; sometimes, it’s about a landscape, such as the Admas Collection. The patterns and colors are all derived from the initial inspiration and concept.

Read more »

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Ethiopian Airlines Statement

March 23rd, 2022

Early Retirement of Mr. Tewolde GebreMariam, Ethiopian Group Chief Executive Officer.

Mr. Tewolde GebreMariam has been under medical treatment in the USA for the last six months. As he needs to focus on his personal health issues, he is unable to continue leading the airline as a Group CEO, a duty which demands closer presence and full attention round the clock. Accordingly, Mr. Tewolde GebreMariam requested the Board of Management of Ethiopian Airlines Group(the “Board”), for early retirement in order for him to focus his full attention to his medical treatment.

The Board, in its ordinary meeting held on Wednesday, March 23, 2022, has accepted Mr. Tewolde’s request for early retirement.

Mr. Tewolde led the Airline for over a decade with remarkable success reflected in its exceptional performance in all parameters including but not limited to exponential growth from one Billion USD annual turn-over to 4.5 Billion, from 33 airplanes to 130 airplanes and from 3 million passengers to 12 million passengers (pre-COVID).

Under his leadership, the airline group has grown by four fold in all measurements building more than USD 700 million worth of vital infrastructure like Africa’s biggest hotel, Cargo terminal, MRO hangars and shops, Aviation Academy and Full Flight Simulators. The Board, the Senior Management, employees and the whole Ethiopian Airlines family express their gratefulness for his contribution and wish him full recovery soon.

The Board will announce the new Group CEO and successor to Ato Tewolde GebreMariam shortly. Mr. Girma Wake, former CEO of Ethiopian Airlines, has been appointed recently as a new Chairman of the Board of Management of Ethiopian Airlines Group by the Ethiopian Public Enterprises Holding & Administration Agency.

Mr. Girma Wake is a highly experienced, successful and well-regarded business leader and a well-known figure in the aviation industry who previously led Ethiopian Airlines for 7 years as a CEO and laid the foundation for the fast and profitable growth of the airline. The combination of his experience, work-culture and drive makes him capable of chairing the board and take the airline to the next level. Mr. Girma’s decision-making skills are tested and well proved.”

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Forbes

The United States announced a plan to remove Ethiopia from the African Growth and Opportunity Act (AGOA) by the first day of January – and shock waves quickly rolled through the U.S. apparel and footwear industries – like a tsunami that no one expected. Manufacturers were alerted that perhaps their good-will African investments – were made in vain, and retailers started to think about pulling out of Ethiopia.

Under stark review, the concept of exiting the Ethiopian AGOA partnership is possibly a huge mistake – one that probably should (and could) be reversed, resolved, extended, or at least peppered with exemptions. America encouraged the apparel and footwear industries to make investments in Ethiopia, and now is potentially leaving “the ask.” Plus, all things considered, an abrupt exit (with only two months’ notice) has frightened other sub-Saharan African investors. They worry that the United States won’t renew AGOA in 2025, and won’t have their back the next time that trouble breaks out.

Of course, China is watching America’s every move and they immediately pounced on the weakness. For years, they have made significant investments in Ethiopia, and the country is sometimes referred as the China of Africa. In keeping with that mindset, they immediately announced a plan to purchase $300 billion worth of goods from Africa over the next three years and invest about $10 billion dollars. China also sent their Foreign Minister Wang Yi directly to Ethiopia’s Capital City (Addis Ababa) to show support for Prime Minister Abiy Ahmed’s elected government

America, on the other hand, worked a different strategy. Sanctions were announced, followed by a 60-day notice of a planned AGOA-EXIT. The United States sent U.S. Secretary of State Antony J. Blinken to nearby Kenya for negotiations, advised US citizens to leave the country, and asked for “precautionary assurances” for USA diplomats. Taking a page from the Administration’s “Diplomacy First” playbook, Secretary Blinken said that all the unrest and atrocities: “Needs to stop.”

Ethiopia’s civil war is constantly marred with accusations of humanitarian, political, and even geopolitical problems, but AGOA’s charter calls for the development of a market-based economy, observing the rule of law, political pluralism, the right to due process and reducing poverty – plus combatting corruption and protecting human rights. There is no right or wrong with considering the cessation of AGOA in Ethiopia – simply because America needs to follow the charter. However, if one takes a holistic view of sub-Sahara Africa, the announced AGOA plug-pulling may be the last straw for the struggling trade program, simply because the Ethiopian exit has reverberated well beyond the country’s borders.

Truth be told, AGOA is not the best trade program that the USA has ever created, but many developing countries have found it to be extremely helpful. For twenty-one years, the AGOA performance has been somewhat lackluster. This year’s trade volume shows little growth from the very first year that the program was created (back in 2001). One explanation is that the program is approximately divided between 55% energy and 45% non-energy sectors. In energy, there is not much duty savings, so oil is shipping to the USA because it is cheap, not because of AGOA

When looking at the results of AGOA, it is more important to focus on the non-energy sector – because that creates the most jobs and helps the most people on a humanitarian level – especially with apparel manufacturing in Kenya, Ghana, Lesotho, Madagascar, Mauritius, and (of course) Ethiopia.

Non-energy shipments were $1.3 billion in 2001 and only $3.8 billion in 2019 – signifying not much growth in 18 years. But, after all this time, it was Ethiopia that finally broke the mold and achieved significant growth in the non-energy sector. That improvement provided thousands of jobs and added to Ethiopia’s growing GDP; exhibiting that the program could really be effective. Now, with America weaponizing AGOA (as a tool to resolve a country conflict), retailers are faced with another significant and growing loss of international supply. To put this in a different perspective, just a few days ago one very large and responsible USA mega-brand announced that they were closing their operations in Ethiopia. Other brands and retailers will probably follow suit.

During the last few years, modern manufacturing facilities were erected, and numerous industrial parks dotted the Ethiopian landscape. Assembled products could now be shipped back to the USA free of duty – which is a significant advantage because (for example) apparel duty rates could average around 20% or higher.

The duty-free incentive was created to offset the cost of development, and the lower worker productivity rates. By accepting the terms of AGOA, the impact on local employment was huge. Ethiopia quickly became the African model for others to follow. However, with AGOA now sitting on the chopping block (along with Mali and Guinea) retailers wonder if the investment was worth the risk, and that line of thinking creates an even bigger problem for all of Africa, because the AGOA program comes up for renewal in just a few years.

The United Nations, the African Union, the United States, and several other countries are working hard to broker a resolution to the Ethiopian conflict. News reports indicate that there is little progress – except for some notice that humanitarian aid is finally reaching the Tigray region. There are also claims that government forces have re-gained control of several key areas that had been overrun by the insurgent Tigray People’s Liberation Front (TPLF).

The USA, for its part, should never approve any country’s bad behavior, but there is a distinct difference in terminology – if skills are being taught and families are being fed. Investors knew that Ethiopia was risky, but they expected America to stand behind their investment. Somehow, over time , there has been a failure to distinguish between a sewing machine operator earning a living, and an insurgent fighting a battle (all within the same country)…

Most everyone hopes that AGOA doesn’t become a missed opportunity.

There is still time between now and January 1st.

Maybe, just maybe, something will change.

Read the full article at forbes.com »

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Reuters

ADDIS ABABA – France’s telecom firm Orange has submitted an expression of interest to participate in the ongoing partial privatisation of Ethiopia’s Ethio Telecom firm, Ethiopia’s ambassador to Paris said on Twitter on Tuesday.

Henok Teferra Shawl said in a tweet Orange had “formally submitted interest to participate in the partial privatisation of @ethiotelecom.”

Priti Patel defends £54.2m payment to France in effort to reduce migrant crossings
Last month, Ethiopia launched a tendering process for the proposed sell-off of a 40% stake in the state-owned carrier Ethio Telecom to private investors, part of the government’s broader plan to open up the Horn of Africa country’s economy.

The telecoms business in Ethiopia, a country with a population of more than 100 million people and one of the region’s biggest economies, is considered lucrative and is expected to draw significant investor interest.

As part of the process to open up the telecoms sector in May authorities handed out the first private operator licence to a consortium led by Kenya’s Safaricom, Vodafone, and Japan’s Sumitomo.

Ethio Telecom reported an 18.4% rise in full-year revenue to end-June to 56.5 billion birr ($1.29 billion).

(Reporting by Dawit Endeshaw; Writing by Elias Biryabarema, Editing by Louise Heavens)

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Forbes

Selamawit Girma, a mother of three living in Ethiopia’s capital Addis Ababa, is worried.

Her monthly salary of 4,000 birr (about $91) isn’t going as far as it used to. Inflation surpassed 20% in Ethiopia last year and it’s still rising–up to 24.5% in June–as the country struggles to contain the economic fall-out of the covid-19 pandemic.

“I am very scared of the current cost [of things],” she told The Addis Standard.

“I am afraid of being on the streets with my children. Prices are increasing in house rent, transport, foods and non-food items … which the government seems to be doing very little about.”

It’s not for want of trying. Ethiopia has one of the most stable and diverse economies in Africa, benefiting from a forward-looking government that has consistently met development targets for its 117 million citizens. The number of Ethiopians living below the poverty line has more than halved since 2000.

Yet, whatever strides are taken domestically, Ethiopia exists within a global financial order that puts the US dollar–the world’s only reserve currency–at its apex.

Supply of these dollars is determined solely by the US Federal Reserve, which has a mandate solely to protect US economic interests.

And while printing trillions of dollars to stimulate demand seems to be helping America–in the short-term, at least–the practice is having a devastating impact on poorer nations whose currencies are directly or indirectly pegged to USD.

“The Fed is tasked with solving US monetary problems and not [those of] other countries,” explained a spokesman for Project Mano, an Ethiopian lobby group that wants Addis Ababa to consider whether bitcoin–a decentralized cryptocurrency with a fixed supply–can break the inflationary cycle.

“It is our problem, because we rely on another country’s monetary policy. They don’t do it out of spite or to hurt us … It’s our own choice to hold dollars.”

Understanding how ultra-loose monetary policies in the West can hurt developing nations isn’t difficult.

The not so almighty dollar

The National Bank of Ethiopia currently holds about $3bn worth of foreign exchange reserves–the vast majority of which is in USD.

These holdings don’t increase proportionally as the Fed prints more and more money, so their real value–or their purchasing power–is gradually eroded by inflation.

At the same time, Ethiopia’s government is overseeing the steady devaluation of its own currency, the birr, in an effort to stop the country’s $12bn trade deficit from growing any larger. (Devaluing a currency makes domestically produced goods more affordable on the international stage, thereby driving exports and helping to balance the books.)

Taken in isolation, each of these trends would be manageable.

But when the value of a country’s domestic currency and the value of its foreign reserves fall in tandem, there is a real and present danger of economic meltdown. Ethiopia must preserve the value of its USD holdings–or an equivalent reserve currency–in order to shield itself from hyperinflation at home.

And it’s getting much harder to do that–not just because of the Fed’s endless money-printing, but also the fact that Ethiopian Airlines, one of the country’s main earners of foreign currency, is facing an uncertain future thanks to covid-19.

With Ethiopia’s GDP rate now growing four times slower than its inflation rate, the country is staring default down the barrel of a gun.

So, what to do about it?

It could simply buy more dollars. That’s China’s approach: more than half of its $3.2tr worth of foreign exchange reserves is believed to be USD, which it uses to manipulate the USD/CNY exchange rate and keep exports rolling off the shelves.

Trouble is, developing nations like Ethiopia can’t afford to stack trillions of dollars.

That leaves three options: hope that America will stop debasing the world’s reserve currency; find new, reliable sources of USD; or, diversify the state’s holdings beyond dollars–preferably by acquiring an asset with a fixed supply that cannot be manipulated by foreign governments. Enter bitcoin.

“Adoption of bitcoin or cryptocurrency in general is scary for any government, but … our project mainly aims at exploring solutions to solve forex issues the government might be facing,” Project Mano asserted. “Since everything else they hold grows in supply–including gold–we are suggesting [they find] something that doesn’t grow, as an experiment.”

Project Mano’s long-term vision encompasses three spheres: mining bitcoin; holding bitcoin; and linking bitcoin to the birr.

The latter two would, in theory, solve the problem of a depreciating reserve currency–but only if bitcoin fulfills its promise and matures into a globally recognized asset class. That, the lobbyists admit, will be seen as a “gamble” by the government.

A safer bet is their proposal to mine and monetize bitcoin–particularly given Ethiopia’s unique energy landscape and developmental status.

A costly green revolution

The East African country has abundant supplies of renewable energy: 90% of its electricity is already powered by domestic hydroelectric plants, with the remainder largely coming from wind, solar and geothermal sources.

That’s just a fraction of its future potential. The government hopes to grow renewable generation capacity fivefold to 25,000 megawatts (MW) by 2037, of which 6,500MW will come from one flagship project: the Grand Ethiopian Renaissance Dam (GERD), situated in the Blue Nile River.

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Travel Daily News

Ethiopian continues to lead Africa in passenger traffic during the COVID crisis

ADDIS ABABA – Ethiopian Airlines Group has become Africa’s top airline in passenger traffic retaining its leadership position in the continent. According to the African Airlines Association’s (AFRAA) report, Ethiopian has been ranked first by passenger and cargo traffic in 2020.

Ethiopian Airlines Group CEO Mr. Tewolde GebreMariam said, “We are honoured to continue our leadership even during the Global Pandemic Crisis which has devastated the aviation industry. This is a manifestation of our resilience and agility. We are excited about the role we played in the fight against the pandemic by continuing our much-needed air connectivity within Africa and with the rest of the world without any flight suspension. We are saving lives through air transport of medical supplies and vaccines.”

Ethiopian Airlines topped the list with the highest passenger traffic transported through Addis Ababa Bole International Airport. A total of 5.5 million passengers have been transported through the airport. Of this traffic, Ethiopian transported 5.2 million passengers and the remaining passengers were transported by other airlines. Ethiopia also topped the list in the most connected countries in Africa due to Ethiopian Airlines’ large number of direct flights within the continent.

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Press Release

Twitter Announces Appointment of Mimi Alemayehou and Departure of Jesse Cohn

Mimi Alemayehou to join the Board, bringing more than 20 years of investment and finance experience across emerging markets

News provided by Twitter, Inc.

SAN FRANCISCO — Twitter, Inc. (NYSE: TWTR) today announced the appointment of Mimi Alemayehou to the Company’s Board of Directors as a new independent director, effective immediately.

“Mimi’s extensive experience overseeing growth in emerging markets in both the public and private sectors will be invaluable as we advance Twitter’s mission to serve the public conversation across the world,” said Patrick Pichette, independent chair of the Twitter Board. “Mimi shares our commitment to social responsibility and strengthening global communities, and we’re eager to benefit from her perspective and regional expertise as we expand Twitter’s presence to Ghana and invest in improving our service across Africa and other regions.”

Ms. Alemayehou, who brings to Twitter’s Board more than 20 years of investment and finance experience across emerging markets, with a strong focus on Africa, said, “I have long respected Twitter’s focus on supporting the diverse global communities that drive public conversation, and am proud to join the team as they work to expand Twitter’s reach around the world. I look forward to working closely with Twitter’s management team and the rest of the Board to help oversee and execute the Company’s long-term growth objectives.” In her current role as Senior Vice President for Public-Private Partnerships at Mastercard, Ms. Alemayehou leads Mastercard’s partnerships with private foundations, international development organizations and non-governmental organizations with the objective of building commercially sustainable digital ecosystems that benefit everyone by advancing financial inclusion, transparency, support to humanitarian response and economic development.

In connection with Ms. Alemayehou’s appointment, Jesse Cohn will be stepping down after an important year on the Board. As one of Twitter’s largest shareholders, Elliott Investment Management will continue to engage with members of the Company’s senior management team and Board, facilitated by the Information Sharing and Engagement Agreement the Company entered into with Elliott.

Mr. Pichette continued, “On behalf of the Board, I want to thank Jesse for his support and contributions as a director. Over the past year, years of foundational work combined with a clear focus on growth and monetization paid off. The pace of innovation at Twitter has increased dramatically, the company is executing at a high level, and the vision of Twitter’s ecosystem value is being realized. We are grateful for Jesse’s insights and commitment to help strengthen Twitter over the course of this important year.”

Jack Dorsey, CEO of Twitter, said, “As we shared at our Analyst Day, we continue to build upon our strengths and are proud of our progress. We are appreciative of Jesse’s input and support during an important year for us.”

Jesse Cohn, Managing Partner at Elliott, said, “It’s been a pleasure to serve on Twitter’s Board during this remarkable period of progress for the company. Over the past year, thanks to the hard work of Twitter’s management team and Board, Twitter has improved operational execution, strengthened the Board’s governance, initiated a share repurchase program, established bold, multi-year performance goals, meaningfully accelerated its release of new products and monetization strategies, and intensified its focus on operational performance and shareholder value creation. Elliott remains one of the company’s largest shareholders, and I look forward to continuing to collaborate with Twitter’s management and Board as it executes on its vision.”

About Mimi Alemayehou

Mimi Alemayehou’s career spans both the public and private sectors across emerging markets. She currently serves as Senior Vice President for Public-Private Partnerships at Mastercard. Prior to joining Mastercard, Ms. Alemayehou was the Managing Director and a Board member for investment platform Black Rhino Group, a portfolio company of Blackstone, where she focused on the development and acquisition of energy and infrastructure assets across Africa. Ms. Alemayehou was previously appointed by President Barack Obama to serve as Executive Vice President of the Overseas Private Investment Corporation (OPIC). During Ms. Alemayehou’s tenure from 2010 to 2014, OPIC’s portfolio grew by more than 24% to $18 billion and the corporation’s Africa portfolio tripled to nearly $4 billion. Prior to OPIC, Ms. Alemayehou was appointed by President George W. Bush to serve as the United States Executive Director on the Board of Directors of the African Development Bank (AfDB). She received a Distinguished Honor Award for her outstanding service in this role. Ms. Alemayehou has also launched entrepreneurial ventures in consulting.

About Twitter, Inc.

Twitter (NYSE: TWTR) is what’s happening and what people are talking about right now. To learn more, visit about.twitter.com and follow @Twitter. Let’s Talk.

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The Africa Report

Ethiopia has been progressively opening its banking sector since 2016. As the country moves ahead with its liberalization process under Abiy Ahmed’s leadership, the pace of reform has picked up. But with the recent flop of telecom privatization; partly because of fears around security, will financial sector opening fare differently? The fate of investment banks will be closely linked to moves to open an Ethiopian Stock exchange, and the wider privatization process.

Since 2018, the list of sectors open to foreign investment has expanded, including logistics and telecoms.

In February, the Ethiopian Parliament completed a draft law to allow partial foreign entry into the banking sector – a stark contrast to the government’s more hostile position a year ago

READ MORE Ethiopia further opens up sectors to diaspora and foreign nationals

What are the provisions of the draft law? How will it impact the banking sector? And what are its wider ramifications?

Slow to bloom

Ethiopia showed signs of opening its banking sector to foreigners in 2016 after adhering to the African Trade Insurance Agency (ATIA)

Backed by regional and international institutions, COMESA and the World Bank, the ATIA aims to attract foreign direct investment (FDI) by offering “ insurance against political upheaval, expropriation and problems with exchange controls on trade” as noted in The Economist.

Following this, nine foreign banks have opened liaison offices:

Read more »

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Capacity Media

Ethiopia received just two bids, from MTN working China’s Silk Road Fund and a US-backed and Vodafone-led consortium, for its two telecoms licences this morning.

The Ministry of Finance sealed its doors (pictured) when the 10:00 deadline for bids had expired, and said it would make a formal announcement after the technical and financial evaluation is completed.

MTN made it clear that it is backed by the Silk Road Fund, a Chinese state-owned investment fund designed to foster increased investment in countries along the country’s One Belt, One Road, economic development project.

The Vodafone consortium is backed by the US government’s International Development Finance Corporation (IFC), which has given a loan of US$500 million, and the UK-backed CDC. The IFC earlier this year invested $300 million in Africa Data Centres, owned by Liquid Intelligent Technologies, formerly Liquid Telecom.

The US and UK financial backing would almosts certainly preclude the possibility of Vodafone using Huawei or ZTE technology for its bid.

Shameel Joosub, CEO of Vodacom group, said today: “We are submitting a strong tender as the Global Partnership for Ethiopia consortium led by Safaricom. It is never an easy job to open up a country’s telecom market, yet the Ethiopian government has managed to move forward with a large number of the regulations required for the benefit of 110 million Ethiopians. The country’s authorities have also repeatedly committed to create and maintain a level playing field for all, giving us confidence that the next round of regulations will be tackled as soon as possible. Our Global Partnership for Ethiopia has a unique mix of experience and know how to help transform Ethiopia into a modern digital economy and to positively impact the lives of Ethiopians.”

Balcha Reba, director general of the Ethiopian Communications Authority (ECA) issued a carefully written statement avoiding the clear fact that there were only two bids, despite two extensions of the deadline from an original date of 10 December 2020 in a process that was already months or years behind schedule.

The ECA held a virtual meeting in November 2020 at which 120 stakeholders took part. This “was an extension of the several months-long consultations as well as the Authority’s continued effort to ensure the process is achieved in a fair and transparent manner”, said the ECA at the time.

Now the ECA is putting a brave face on it, saying: “We are delighted to have had interest from established telecoms operators around the world.”

The ECA acknowledged that interest “in this unprecedented opportunity” was from companies “including … Africa’s two telecoms giants, MTN, the largest telecoms operator on the continent, and the Vodafone/Vodacom consortium, including Kenya’s largest telecoms provider, Safaricom.” But it named no other operators.

The Ministry of Finance also tweeted pictures of two executives, from MTN and the Vodafone group, signing documents in its headquarters, before adding a picture showing the doors sealed after the deadline passed.

The ministry said in the tweet accompanying the two pictures: “Delighted to have received the bids for the nationwide telecom service licenses from two giant telecom operators consortium of Safaricom (Kenya), Vodafone Group (UK), Vodacom Group (South Africa), CDC Group (UK), & Sumitomo Corporation (Japan) #MTN Group Limited.”

In February Vodafone told Capacity its Kenyan subsidiary Safaricom “will be the lead partner” in a bid for Ethiopia, working with its main shareholder, Vodacom of South Africa. Vodafone is the main shareholder in Vodacom. Vodafone told Capacity that technological support will come from Sumitomo, the Japanese company that has been working in Myanmar with KDDI and state-owned operator MPT.

Vodafone said this morning that it was checking the wording of the Ministry of Finance’s statement, to clarify whether there were just the two bidders.

MTN said in a statement this morning: “MTN Group confirms that it is participating with equity partners in a bid for a telecoms licence in Ethiopia, Africa’s second most-populous country which represents the last and largest telco liberalisation opportunity in the world.”

The group added: “Our participation is aligned with our strategy, Ambition 2025, focusing on capturing growth from digital acceleration across the continent. It has been made in partnership with Silk Road Fund from China. Other partners will be disclosed on a successful bid outcome.”

Ralph Mupita, president and CEO of MTN group, said: “Ethiopia provides the largest telecommunication and digital services growth opportunity in Africa over the medium term and fits into our pan-Africa focus and platform strategy. We are being guided by our capital allocation framework in our assessment of this opportunity.”

Orange is known to be interested in the Ethiopian market. However the government of Ethiopia has said it wants to sell shares in the current monopoly provider, Ethio Telecom, and is likely to bid for a stake. Orange in the past had a management contract with Ethio Telecom.

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PRWeb

Moneta Technologies “Amole” and Visa form Strategic Partnership to Expand Access to Digital Payments for Ethiopian Merchants and Banks

ADDIS ABEBA — At today’s event, Amole, Ethiopia’s largest mobile eWallet platform and Visa (NYSE: V), the global leader in digital payments, announced a strategic partnership and the launch of the Amole eCommerce Gateway, using Visa CyberSource infrastructure which supports digital payments for merchants and banks. Dashen Bank will be the first bank to use the Amole eCommerce Gateway making it the first Ethiopian bank to acquire all three major international cards (Visa, Mastercard and American Express).

With this strategic relationship, Amole and Visa will seek to eliminate barriers to regional and cross-border commerce and offer an expanded set of eCommerce capabilities to Amole merchants by enabling secure and convenient cashless payment solutions in Ethiopia and Kenya. Ethiopian banks licensed by international card associations can now use the Amole eCommerce Gateway to acquire international cards online on behalf of their merchants. The Amole eCommerce Gateway uses the Visa CyberSource infrastructure making it secure with fraud-monitoring systems to protect merchants from chargebacks.

“Today, with this partnership, we can accept digital payments from anywhere. As recently as 2018, a developer or business owner in Ethiopia did not have the ability to accept online payments until Amole introduced its open API platform in July 2018. We started Amole to become the payment and commerce platform to harness the great potential inherent in the B2B2C market that makes Ethiopia the sleeping giant,” said Yemiru Chanyalew Founder and CEO Moneta Technologies. The partnership will be a game changer for emerging Ethiopian exporters and online businesses along with Ethiopian Airlines logistics to fulfill Ethiopia’s aspiration to become the eCommerce hub of East Africa under the African Free Trade Agreement (“AfCFTA”). International payment receipt and cross-border international payment is now enabled, thanks to Amole.

Moneta becomes the first Fintech in Ethiopia to launch Visa CyberSource digital payment gateway for merchants and banks to drive cross-border eCommerce

Amole provides powerful APIs to help developers quickly build digital payments experiences online. With only a few lines of code, developers can create custom checkout experiences for Amole Wallet and Prepaid card. Other integrated features include, instantly send bulk transfers to Amole Wallets, online bill payments, airtime top-up, a marketplace of digital content, verify the identity of customers through verification APIs, and much more. Amole also supports localized payment channels, including mobile money, QR code, USSD, mobile app and Telegram Bot payments integrated to its mPOS platform at its 8000 merchants.

“Embracing digital payments and a potentially cashless society is where the future lies. Visa is investing more than ever in our global assets, infrastructure, and digital capabilities to reshape the future of commerce. For merchants, digital payments mean reducing costs associated with handling and losing cash and broadening their customer base as more and more people move away from cash. We are very proud to partner with Moneta Technologies “Amole” to ensure that the market enjoys a range of domestic and international benefits that will transform their e-commerce experience, said Abebe Girmay, Visa’s Country Lead for Ethiopia.

About Moneta Technologies

Moneta Technologies S.C. is a Fintech company, fully-owned subsidiary of Fettan Holdings, Limited of Kenya, the company is headquartered in Addis Ababa, Ethiopia. Moneta Payment solution is a secure and efficient payment platform that links consumers, banks, merchants, mobile content aggregators and service providers into an electronic payment ecosystem.

Moneta aims to deliver a collusive financial service to the unbanked and under-banked people of Ethiopia; enabling them access, aggregated financial services from their banks, service providers, agents and merchants at a single point of service. Our mission is to deliver an effective, efficient, reliable, accessible and secure payment system that is relevant to Ethiopia’s environment and fully supports the customer and the country’s needs.

About Visa

Visa (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network – enabling individuals, businesses and economies to strive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of digital commerce on any device for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit http://www.Visa.com

About Dashen Bank

Dashen Bank S.C. established on September 20, 1995 is the largest private bank and leading digital bank in Ethiopia, pioneered electronic banking in Ethiopia and is the only bank accepting the four payment card schemes (Amex, VISA, MasterCard, and UnionPay). For more information on Dashen, visit their website www,DashenBankSC.com.

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CNBC Africa

Ethiopia’s economy grew by 6% despite COVID-19 shocks

Ethiopia’s economy grew by 6 per cent in the 2020 financial year despite the COVID-19 pandemic.

“Six percent is a very good performance considering what was going on around the world,” Zemedeneh Negatu, Chairman of the U.S.-based Fairfax Africa Fund, tells CNBC Africa.

What did Ethiopia do right?

“Last year [Ethiopia] took rapid early remedial actions against COVID and interestingly, according to the Prime Minister, they actually took a contrarian view to combat it,” Zemedeneh says. “They did not lockdown the economy although they did take measures to safeguard the public from the COVID pandemic.”

Zemedeneh adds: “Despite all kinds of other challenges for example the export market, flower and other things had slowed down globally, but sectors like mining did extremely well, very significant increase in mining gold and other things. The manufacturing [and] the agriculture sector had also performed well.”

Read more and watch the video at cnbcafrica.com »

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Business: Ethiopian Economy Regaining Momentum in 2021

CNBC Africa

Fairfax Africa Fund Chair, Negatu sees Ethiopian economy regaining momentum in 2021

March 15th, 2021

Ethiopia’s economy saw a slowdown in the fourth quarter of 2020 despite the country having some of the laxest COVID-19 measures in the region.

“Overall considering what’s going on around the world and in Africa and based on data from the African Development Bank and IMF comparatively speaking Ethiopia is doing better than most African countries [and regaining its momentum],” says Chairman of the U.S.-based Fairfax Africa Fund Zemedeneh Negatu.

Read more and watch the video at cnbcafrica.com »

African Development Bank: African Economic Outlook 2021

Recent macroeconomic and financial developments in Ethiopia

Ethiopia’s economy grew by 6.1% in 2020, down from 8.4% in 2019, largely because of the COVID–19 pandemic. Growth was led by the services and industry sectors, whereas the hospitability, transport, and communications sectors were adversely affected by the pandemic and the associated containment measures to prevent the spread of the virus. The fiscal deficit, including grants, increased slightly during 2020, financed mainly by treasury bills. Tax revenue increased by 16%, but the tax-to-GDP ratio declined to 9.2% in 2020 from 10% in 2019 due to delayed implementation of tax reforms. Total public spending remained stable, in line with the country’s fiscal consolidation strategy.

In 2020 inflation reached 20.6%, well above the 8% target, due to pandemic-induced supply chain disruptions and expansionary monetary policy. In November 2020, the official exchange rate was devalued by about 8% to 35.0 birr per US dollar. Export revenues increased by 12% in 2020, as exports of gold, flowers, coffee, and chat increased while imports declined by 8.1%. This helped narrow the current account deficit to 4.4% in 2020 from 5.3% in 2019. Service sector exports declined by about 6%, mostly because of lower revenue from Ethiopian Airlines. Foreign direct investment (FDI) fell 20% to 2.2% of GDP, and personal remittances declined by 10% to 5.3% of GDP. Poverty was projected to decline from 23.5% in 2016 to 19% by end of 2020. But pandemic-driven job losses, estimated at as many as 2.5 million, will impede poverty reduction.

Outlook and risks

The medium-term economic outlook is contingent on the resolution of the COVID–19 crisis, the pace of the economic recovery, and such other shocks as civil strife and climate change. Real GDP growth in 2021 is projected to fall to 2%, then recover to about 8% in 2022, led by a rebound in industry and services. Monetary policy is expected to remain flexible in response to the government’s financing requirements. Increased use of open-market operations is expected to reduce inflation gradually. The fiscal deficit is projected to increase as tax policy reforms are delayed due to COVID–19. The current account is likely to deteriorate in 2021 before improving in 2022 as service exports gradually pick up. The key downside risks to the economic outlook include low investor confidence, in part due to sporadic domestic conflicts, weakness in global growth, and climate change.

Financing issues and options

Ethiopia’s financing requirements are significant given its large physical and social infrastructure needs and low tax-to-GDP ratio, which averaged 10% from 2017 to 2020. The primary deficit plus debt service was estimated at nearly 4% of GDP. As of June 2020, total public debt was about 57% of GDP, slightly more than half of which was external. Since 2017, Ethiopia has been classified at high risk of public debt distress due to weak export performance coupled with increased import-intensive public infrastructure investments. The International Monetary Fund’s 2019 debt sustainability analysis estimated the net present value of debt-to-exports at 247.6% and debt service-to-exports at 24.6%; the highest sustainable levels are 180% and 15%, respectively. Ethiopia benefited from the G20 Debt Service Suspension Initiative, and the government is taking measures to contain the debt burden as part of the so-called Home-Grown Economic Reform agenda, which includes fiscal consolidation, expanding public financing sources, a moratorium on nonconcessional borrowing, harnessing grants and concessional loans, and debt restructuring. Gross reserves amounted to $3.1 billion in 2020, or 2.5 months of imports and are unlikely to provide an alternative source of development financing in the short term. Expansion of public debt in the context of large public expenditure requirements could constrict the fiscal space and lead to repayment risks, especially since $1 billion in eurobonds come due in December 2024. Further reforms in public finance and investment management are needed to improve the efficiency of public expenditures.

Read the full report »

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CNBC Africa

Fairfax Africa Fund Chair, Negatu sees Ethiopian economy regaining momentum in 2021

Ethiopia’s economy saw a slowdown in the fourth quarter of 2020 despite the country having some of the laxest COVID-19 measures in the region.

“Overall considering what’s going on around the world and in Africa and based on data from the African Development Bank and IMF comparatively speaking Ethiopia is doing better than most African countries [and regaining its momentum],” says Chairman of the U.S.-based Fairfax Africa Fund Zemedeneh Negatu.

Read more and watch the video at cnbcafrica.com »

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Related:

African Development Bank: African Economic Outlook 2021

Recent macroeconomic and financial developments in Ethiopia

Ethiopia’s economy grew by 6.1% in 2020, down from 8.4% in 2019, largely because of the COVID–19 pandemic. Growth was led by the services and industry sectors, whereas the hospitability, transport, and communications sectors were adversely affected by the pandemic and the associated containment measures to prevent the spread of the virus. The fiscal deficit, including grants, increased slightly during 2020, financed mainly by treasury bills. Tax revenue increased by 16%, but the tax-to-GDP ratio declined to 9.2% in 2020 from 10% in 2019 due to delayed implementation of tax reforms. Total public spending remained stable, in line with the country’s fiscal consolidation strategy.

In 2020 inflation reached 20.6%, well above the 8% target, due to pandemic-induced supply chain disruptions and expansionary monetary policy. In November 2020, the official exchange rate was devalued by about 8% to 35.0 birr per US dollar. Export revenues increased by 12% in 2020, as exports of gold, flowers, coffee, and chat increased while imports declined by 8.1%. This helped narrow the current account deficit to 4.4% in 2020 from 5.3% in 2019. Service sector exports declined by about 6%, mostly because of lower revenue from Ethiopian Airlines. Foreign direct investment (FDI) fell 20% to 2.2% of GDP, and personal remittances declined by 10% to 5.3% of GDP. Poverty was projected to decline from 23.5% in 2016 to 19% by end of 2020. But pandemic-driven job losses, estimated at as many as 2.5 million, will impede poverty reduction.

Outlook and risks

The medium-term economic outlook is contingent on the resolution of the COVID–19 crisis, the pace of the economic recovery, and such other shocks as civil strife and climate change. Real GDP growth in 2021 is projected to fall to 2%, then recover to about 8% in 2022, led by a rebound in industry and services. Monetary policy is expected to remain flexible in response to the government’s financing requirements. Increased use of open-market operations is expected to reduce inflation gradually. The fiscal deficit is projected to increase as tax policy reforms are delayed due to COVID–19. The current account is likely to deteriorate in 2021 before improving in 2022 as service exports gradually pick up. The key downside risks to the economic outlook include low investor confidence, in part due to sporadic domestic conflicts, weakness in global growth, and climate change.

Financing issues and options

Ethiopia’s financing requirements are significant given its large physical and social infrastructure needs and low tax-to-GDP ratio, which averaged 10% from 2017 to 2020. The primary deficit plus debt service was estimated at nearly 4% of GDP. As of June 2020, total public debt was about 57% of GDP, slightly more than half of which was external. Since 2017, Ethiopia has been classified at high risk of public debt distress due to weak export performance coupled with increased import-intensive public infrastructure investments. The International Monetary Fund’s 2019 debt sustainability analysis estimated the net present value of debt-to-exports at 247.6% and debt service-to-exports at 24.6%; the highest sustainable levels are 180% and 15%, respectively. Ethiopia benefited from the G20 Debt Service Suspension Initiative, and the government is taking measures to contain the debt burden as part of the so-called Home-Grown Economic Reform agenda, which includes fiscal consolidation, expanding public financing sources, a moratorium on nonconcessional borrowing, harnessing grants and concessional loans, and debt restructuring. Gross reserves amounted to $3.1 billion in 2020, or 2.5 months of imports and are unlikely to provide an alternative source of development financing in the short term. Expansion of public debt in the context of large public expenditure requirements could constrict the fiscal space and lead to repayment risks, especially since $1 billion in eurobonds come due in December 2024. Further reforms in public finance and investment management are needed to improve the efficiency of public expenditures.

Read the full report »

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Shega

ArifPay Closes A $3.5 M Private Placement Round From 31 Investors

ArifPay ( ArifPay Financial Technologies Share Company ), an upcoming fintech company in Ethiopia, raised $3.5M / 140M ETB from 31 investors in a private placement round. From the total raised capital, the paid capital is $1M while the rest $2.5M is a subscribed capital. Investors are expected to pay the subscribed capital in the period of 2 years.

ArifPay is a mobile point of sale system which will allow ATM cardholders to make electronic transactions via their smartphones.

The company intends to launch M-pos and gateway-related digital financial products. It aims to allow people to use their mobile phones for conducting financial services including payments.

ArifPay sold 140,000 shares to the 31 investors with each share having a value of 1000 ETB. The shares are sold in a primary market. However, this was not a public offering rather a private placement as ArifPay hasn’t made a call to the public to buy the shares. The company plans to raise a fund through a public offering in the coming years. All investors are Ethiopian or Ethiopian Born Foreign Nationals as National Bank doesn’t allow non-Ethiopian foreign citizens to invest in Ethiopia’s financial sector.

ArifPay is founded by similar founders of Zay Ride, which is one of the pioneer ride-hailing platforms in Ethiopia.

Speaking to Shega about the fundraising, Habtamu Tadesse, Founder, and CEO of ArifPay said, ” We are able to raise $3.5M from 31 shareholders within a short period of time. We believe ArifPay will change the financial industry for the better.”

ArifPay is currently in the process to receive a Payment System Operator License ( For POS and Online gateway business ) from the National Bank of Ethiopia. ArifPay aims to launch its services by the end of May 2021.

Officially referred to as “Licensing and Authorization of Payment System Operators Directive (ONPS/02/2020), It is remembered that National Bank has issued a new directive that allows non-traditional financial institutions also known as financial technology (Fintech) companies to start offering payment processing and related services in the Ethiopia market by acquiring a payment system operator license issued by the regulator.

There are five licenses under the payment system operator directive. These licenses are National Switch, Switch Operator, ATM operator, POS operator, and payment gateway license. Read Our Guide: How to Get Started As A Payment System Operator in Ethiopia

In a statement sent to Shega, the company said, “Once operational, ArifPay aspires to make a significant contribution to the financial sector by offering digital-based payments services that meet the needs of consumers and merchants towards cash-lite transactions in line with the national agenda of the digital economy.”

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Feres to Expand to the Ecommerce Space

Taxi-hailing Company ‘Feres’ launches an e-commerce service called Feresegna. (Shega Media)

Shega

Feres, a taxi-hailing company that has become a major player in the ride-hailing sector after joining the market a year ago is now moving to the e-commerce space and is launching an online marketplace and delivery service.

The platform is called Feresegna. Feresegna is a new e-commerce and delivery service that plans to join the market with different value-added features. Feresegna is a sister brand of Feres. Feres will be taking over the logistics and delivery side while E-birr serves as a payment solution.

Ebirr which is the latest entrant to the mobile money space in Ethiopia is also integrated with Feres and claims to have 2 million users, 15,000 + and 5000 + Agents and resellers.

Feresegna aims to capitalize on Fere’s driver and cab network to deliver orders to the customer.

Semir Nasir, Feresgnya manager says, “Feresegna, after understanding the growing demand of the eCommerce, the delivery service and the limitation of the options provided, is planning to join the market and fill the gaps between the huge demand and few offer.”

Feresegna will be a marketplace for merchants and plans to provide access to an online shop for businesses that are offline. In the new platform, Online shop is going to be anything from restaurants to apparel stores.

Semir added, “With the services we are planning to offer, that is tech efficient, fast, and effective; we plan to create many job opportunities, create accessible products for customers and be a platform for local business.”

Fersegna will first start delivering in Addis Abeba and aim to cover other cities outside of the capital soon.

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KWGN-TV

Yoseph Assefa and Fetien Gebre-Michale created the Ethiopian Food Truck back in 2015 and it was the first Ethiopian food truck in Colorado serving traditional recipes fresh and quick all over the Denver metro area.

The colorful menu features some of the mos popular Ethiopian vegetarian dishes alongside chicken and beef options.

You can find out where the Ethiopian Food Truck is by following them on their website at konjoethiopianfood.com/food-truck.

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Bloomberg

By Samuel Gebre

The International Monetary Fund backed Ethiopia’s plan to rework its debt under the Group of 20 common framework as it reached a staff-level agreement with the government on credit facilities.

To strengthen debt sustainability, the authorities aim to lower the risk of debt distress rating to moderate by re-profiling debt service obligations,” the lender said in an emailed statement on Tuesday. “In this context, the fund welcomes Ethiopia’s request for debt treatment under the G20 Common Framework.”

Ethiopia announced plans last month to rework its liabilities under the G-20 program that seeks to include private creditors into an agreement on debt relief for countries that need it following the fallout from the coronavirus pandemic. The nation’s Eurobonds plunged the most on record following the revelation, and then partly recovered after the government said it would only approach private creditors as a last resort.

Ethiopia Eurobonds Plunge as Nation Seeks G-20 Debt Review The IMF reached a staff-level agreement with Ethiopia on policy measures for the completion of the first and second reviews under the Extended Credit Facility and Extended Fund Facility arrangements, according to the statement. “Risks to the economic outlook are tilted to the downside,” the IMF said, projecting economic growth of 2% in 2020-21 and 8.7% in the following fiscal year.

Several economic and political uncertainties have hit the Horn of Africa nation from the pandemic to war in the northern Tigray region and a desert locust invasion. “A modest fiscal expansion is envisaged this fiscal year to accommodate the humanitarian assistance and reconstruction needs,” Sonali Jain-Chandra. who led the IMF staff team, said in the statement. “At the same time, the authorities are now moving to enhance domestic revenue mobilization.”

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IMF, Ethiopia agree framework for loan deal reviews

The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. (REUTERS Photo)

Reuters

Updated: February 24th, 2021

NAIROBI (Reuters) – The International Monetary Fund said on Tuesday it had agreed a blueprint for the completion of reviews of Ethiopia’s loan programme, taking account of the impact of the coronavirus and the country’s “domestic security situation”.

The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Agreed in December 2019, the three-year programme is worth $2.9 billion. Performance under it has been strong, the IMF said.

The reviews, whose timetable the fund did not outline, were “focused on balancing the need to address ongoing challenges created by the pandemic and domestic security” while laying the foundation for growth, IMF Deputy Division Chief Sonali Jain-Chandra said in a statement

The security situation “has created humanitarian and reconstruction needs that require an adjustment of policies and support from the international community,” she added.

The statement made no direct reference to the war that began in November when Prime Minister Abiy Ahmed ordered an offensive against the Tigray People’s Liberation Front (TPLF), the former ruling party in the northern region, after regional forces attacked federal army bases there.

Abiy declared victory less than a month later but low-level fighting continues.

Tuesday’s agreement is subject to approval by the IMF executive board.

Finance Minister Ahmed Shide and State Minister of Finance Eyob Tekalign Tolina did not respond to requests from Reuters for comment.

The Fund also said it welcomed Ethiopia’s request for “debt treatment under the G20 Common Framework.”

Last month, Ethiopia said it planned to restructure its sovereign debt under the framework, designed to help with economic pressures induced by COVID-19, and was examining all options.

The IMF said that economic growth is projected to be 2% in 2020/21, largely the effects of the pandemic, but it is expected to rebound to 8.7% in 2021/22 in line with a global recovery.

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S&P joins Fitch in downgrade of Ethiopia on potential debt restructuring

S&P said it estimated Ethiopia’s public debt repayment needs at about $5.5 billion over 2021-2024, including a $1 billion Eurobond due in 2024. The ratings agency added that the economic effects of the COVID-19 pandemic have slowed Ethiopia’s economic activity in the services and industry sectors. (Photo: Addis ababa skyline/Wiki Media)

Reuters

Updated: February 13th, 2021

S&P Global Ratings on Friday downgraded Ethiopia’s long-term foreign and local currency sovereign credit ratings to ‘B-’ from ‘B’ on potential debt restructuring, announcing the move days after Fitch Ratings downgraded the country.

“Exacerbated by the effects of the COVID-19 pandemic, Ethiopia’s structurally weak external balance sheet has deteriorated further, in our view”, S&P Global Ratings said.

On Tuesday, Ethiopia’s sovereign dollar bonds dropped nearly 2 cents as Fitch chopped Ethiopia’s credit score by two notches after Addis Ababa signaled it could be the first with an international government bond to use a new G20 ‘Common Framework’ plan.

The scheme, which is open to over 70 of the world’s poorest countries, encourages their governments to defer or negotiate down their external debt as part of a wider debt relief program.

S&P said it estimated Ethiopia’s public debt repayment needs at about $5.5 billion over 2021-2024, including a $1 billion Eurobond due in 2024.

The ratings agency added that the economic effects of the COVID-19 pandemic have slowed Ethiopia’s economic activity in the services and industry sectors, including retail trade, hospitality, transportation, and construction.

S&P described the Tigray conflict in November 2020 that followed increased tensions between the federal and local authorities as “the most significant (conflict) since Prime Minister Abby Ahmed took office in 2018.”

“Another outbreak of armed conflict could spur wider ethnic tensions, weakening Ethiopia’s political and institutional framework and threatening the government’s transformative reform agenda”, it added.

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Ethiopia Dollar Bonds Drop After Fitch Downgrade

Reuters

Updated: February 11th, 2021

LONDON – Ethiopia’s sovereign dollar bonds dropped nearly 2 cents after Fitch downgraded the country toCCC, citing the government’s plan to make use of the new G20common framework to overhaul its debt burden.

The country’s outstanding 2024 bond dropped to as low as 92.06 cents in the dollar, according to Tradeweb data, trading close to record lows hit in late January when Ethiopia surprised markets with its announcement to seek debt relief.

“(This is) the first negative spillover from last week’s decision to go for the G20 Common Framework, a process that no euro bond issuer has been though yet, and one that could take some time, especially as private sector creditors have to be included,” said Simon Quijano-Evans, chief economist at Gemcorp Capital.

Fitch said earlier that the downgrade reflects the government’s announcement that it is looking to make use of theG20 framework, “which although still an untested mechanism,explicitly raises the risk of a default event.”

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Update: Ethiopia Will Approach Private Creditors Only as a Last Resort

Fitch Downgrades Ethiopia Due to Debt Restructuring

The downgrade reflects the government’s announcement that it is looking to make use of the G20 “Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI)” (G20 CF), which although still an untested mechanism, explicitly raises the risk of a default event. (Fitch Ratings)

Fitch Ratings

Fitch Downgrades Ethiopia to ‘CCC’

Fitch Ratings – Hong Kong – 09 Feb 2021: Fitch Ratings has downgraded Ethiopia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC’ from ‘B’.

Fitch typically does not assign Outlooks or apply modifiers to sovereigns with a rating of ‘CCC’ or below.

KEY RATING DRIVERS

The downgrade reflects the government’s announcement that it is looking to make use of the G20 “Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI)” (G20 CF), which although still an untested mechanism, explicitly raises the risk of a default event.

The G20 CF, agreed in November 2020 by the G20 and Paris Club, goes beyond the DSSI that took effect in May 2020, in that it requires countries to seek debt treatment by private creditors and that this should be comparable with the debt treatment provided by official bilateral creditors. This could mean that Ethiopia’s one outstanding Eurobond and other commercial debt would need to be restructured, potentially representing a distressed debt exchange under Fitch’s sovereign rating criteria. There remains uncertainty over how the G20 CF will be implemented in practice, including the requirement for private sector participation and comparable treatment. Fitch’s sovereign ratings apply to borrowing from the private sector, so official bilateral debt relief does not constitute a default, although it can point to increasing credit stress.

Within the context of Paris Club agreements, comparable treatment requirements are not always enforced and the scope of debt included can vary. The Paris Club states that the requirement for comparable treatment by other creditors can be waived in some circumstances, including when the debt represents only a small proportion of the country’s debt burden.

The focus of Ethiopia’s engagement with the G20 CF will be on official bilateral debt, as reprofiling of this will have the biggest impact on overall debt sustainability. Nonetheless, the terms of the framework clearly create risk that private sector creditors will also be negatively affected. The G20 statement on the G20 CF indicates that debt treatments will not typically involve debt write-offs or cancellation unless deemed necessary. The focus will instead be on some combination of lowering coupons and lengthening grace periods and maturities. The extent of debt treatment required will be based upon the outcome of the IMF’s Debt Sustainability Analysis for Ethiopia, which is currently being updated. However, any material change of terms for private creditors, including the lowering of coupons or the extension of maturities, would be consistent with the definition of default in Fitch’s criteria.

The bulk of Ethiopia’s public external debt is official multilateral and bilateral debt. Government and government-guaranteed external debt was USD25 billion in fiscal year 2020 (FY20, which ended in June 2020). Of this, USD3.3 billion was owed to private creditors. This includes Ethiopia’s outstanding USD1 billion Eurobond (1% of GDP) due in December 2024, with minimal annual debt service of USD66 million until the maturity; and USD2.3 billion government-guaranteed debt owed to foreign commercial banks and suppliers. Other SOE debt to private creditors which relates to Ethio Telecom and Ethiopian Airlines is a further USD3.3 billion. While this is not guaranteed by the government, it represents a potential contingent liability.

Ethiopia’s external finances are a rating weakness and this is the main factor behind the intention of using the G20 CF. Persistent current account deficits (CAD), low FX reserves and rising external debt repayments present risks to external debt sustainability. Ethiopia’s external financing requirements, at more than USD5 billion on average in FY21-FY22 including federal government and SOE amortisation, are high relative to FX reserves, which we forecast to remain at around USD3 billion. Reserves cover only around two months of current external payments.

The CAD narrowed to 4.1% of GDP in FY20 as imports declined, maintaining the trend since FY15 when the CAD was 12.5% of GDP. We forecast the CAD to hover around 4% of GDP, although this does not incorporate potential import costs associated with vaccines to combat the coronavirus pandemic. Smaller CADs have not eased pressure on FX reserves because net FDI has been lacklustre (averaging 2.7% of GDP in FY19-FY20) and net external borrowing has moderated with negative net borrowing by SOEs. The central bank has allowed sharper exchange rate depreciation, but the currency nonetheless remains overvalued, with a weaker rate in the parallel market. Proposed sales of mobile licenses and a stake in Ethio Telecom, the state-owned telecoms company, are an upside risk to FDI inflows and reserves in FY21-FY22.

The IMF assessed Ethiopia at high risk of external debt distress in its latest assessment in 2020, with Ethiopia breaching thresholds on external debt service/exports and the present value of external debt/exports. An improvement from high to moderate risk is a central aim of the three-year arrangement with the IMF agreed in late 2019 under the Extended Credit Facility and the Extended Fund Facility. Given the difficulty of substantially boosting exports in the near term, the main route to achieve this is via reducing debt service costs. Within the IMF programme, the authorities planned by the first review to undertake additional reprofiling of bilateral loans but this has not yet happened. The pandemic has placed further emphasis on debt reprofiling.

Ethiopia and the IMF reached staff-level agreement on the first review of the programme in August 2020, but this awaits board approval. The Fund’s press release recognised that performance had mostly been good, but also emphasised the need for financial support from Ethiopia’s international partners including through debt reprofiling.

Ethiopia’s ‘CCC’ IDRs also reflect the following key rating drivers:

Strong economic growth potential and an improving policy framework support the rating, while double-digit inflation, low development and governance indicators and elevated political risks weigh on the rating.

The coronavirus pandemic continues to present significant risks to Ethiopia, but the negative economic impacts since the onset have been somewhat contained so far. Given that the fiscal year ends in June, we do expect more of a hit to growth in FY21 than FY20, but forecast a return to growth rates in the 6%-7% range over the medium term. The government has maintained considerable budgetary discipline, with moderate increases in the general government budget deficit, to 2.8% of GDP, and government debt/GDP (31.5%), while total SOE debt/GDP (25.6%) has fallen. However, the pandemic presents risks of upward pressure on spending. Government financing has continued its transition towards market-based T-bill auctions and away from the long-standing system of direct advances from the National Bank of Ethiopia (NBE, the central bank). This is a core part of the IMF programme, which seeks to promote monetary policy reforms to help gradually tackle inflation that has remained extremely high at close to 20%.

The military conflict in the Tigray region from November 2020 has underlined ongoing political risks in Ethiopia as well as for Ethiopia’s international relations. Considerable domestic political uncertainty, related to the delayed 2020 parliamentary election (now planned for June) and ongoing ethnic and regional tensions within the country, remains a risk to Ethiopia’s credit metrics, in Fitch’s view. Greater political unrest could, for example, act as a drag on FDI and tax collection and exert further upward pressure on inflation. It could also lead to worsening relations with some bilateral partners and hold up donor flows, as illustrated by the suspension of some flows from the EU in December.

ESG – Governance: Ethiopia has an ESG Relevance Score (RS) of 5 for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption, as is the case for all sovereigns. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in our proprietary Sovereign Rating Model. Ethiopia has a low WBGI ranking in the 25th percentile, reflecting in particular political instability, as well as low scores for voice and accountability and regulatory quality.

RATING SENSITIVITIES

The main factors that could, individually or collectively, lead to negative rating action/downgrade:

- Structural Features: Stronger evidence that Ethiopia’s engagement in the G20 CF will lead to comparable treatment for private sector creditors consistent with a default event under Fitch’s criteria.

- External Finances: Increased external vulnerability that heightens the risk of default irrespective of the G20 CF, such as the emergence of external financing gaps and downward pressure on already low foreign-exchange reserves.

The main factors that could, individually or collectively, lead to positive rating action/upgrade are:

- Structural Features: Clarity that the G20 CF will not lead to a default event.

- External Finances: Stronger external finances with acceleration in exports, for example, leading to smaller CADs and higher foreign-currency reserves.

SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)

In accordance with the rating criteria for ratings in the ‘CCC’ range and below, Fitch’s sovereign rating committee has not used the SRM and QO to explain the ratings, which are instead guided by the rating definitions.

Fitch’s SRM is the agency’s proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch’s QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from ‘AAA’ to ‘D’. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579].

KEY ASSUMPTIONS

We assume that Ethiopia pursues involvement in the G20 CF.

We expect global economic trends and commodity prices to develop as outlined in Fitch’s Global Economic Outlook.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG CONSIDERATIONS

Ethiopia has an ESG Relevance Score of 5 for Political Stability and Rights as World Bank Governance Indicators have the highest weight in Fitch’s SRM and are therefore highly relevant to the rating and a key rating driver with a high weight.

Ethiopia has an ESG Relevance Score of 5 for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as World Bank Governance Indicators have the highest weight in Fitch’s SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight.

Ethiopia has an ESG Relevance Score of 4 for Human Rights and Political Freedoms as the Voice and Accountability pillar of the World Bank Governance Indicators is relevant to the rating and a rating driver.

Ethiopia has an ESG Relevance Score of 4 for Creditor Rights as willingness to service and repay debt is relevant to the rating and is a rating driver, as for all sovereigns.

Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.

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Africa Report: Ethiopia Debt Restructuring Plan Faces Hurdles of Transparency

(Reuters photo)

The Africa Report

Ethiopia’s plan to seek debt restructuring under a G20 common framework agreed in November triggered a sell-off in African debt at the end of January on fears of a contagion effect.

The framework enables debtor countries to seek an IMF programme to strengthen their economies and renegotiate their debts with public and private creditors. But such a debt restructuring for Ethiopia would face barriers due a lack of transparency, analysts say.

Any attempt to reconcile balance of payments and published public external debt figures with underlying debt-creating flows shows information gaps and supports “a narrative of opaque lending”, argues Irmgard Erasmus, senior financial economist at NKC African Economics in Cape Town.

Along with Djibouti and Zambia, Ethiopia’s dealings with China “raise the probability of higher-than-estimated debt contracted by extra-budgetary units (EBUs) as well as potentially large contingent liabilities,” she writes in a research note.

China does not publish official or non-official bilateral debt agreements with central governments or state-owned enterprises, she notes.

The channel through which private-sector participation in the framework can be forced is not clear, Erasmus says.

“The agreement of the principles of the G20 Common Framework is positive but negotiations in actual restructurings are likely to be challenging,” says Mark Bohlund, senior credit research analyst at REDD Intelligence in London. Lack of clarity on what is owed to China is one obstacle. While he hasn’t seen any firm evidence of Chinese loans to Ethiopia being understated, there is “less transparency” on Chinese lending, he says.

The fact that India and Turkey, which are non-Paris club G20 lenders, are the largest bilateral creditors after China, may complicate an Ethiopian restructuring, Bohlund says.

A further stumbling block is reluctance from debtor nations to participate in fear of adverse credit rating actions. African countries intending to tap international debt markets this year, such as Tunisia, Ghana and Kenya, may be reluctant to join the initiative, Erasmus says.

Unrealistic growth outlook

For Africa, recent sharp declines in external borrowing costs for many countries amid global optimism on emerging markets provides a “silver lining” to the cloud of debt woes, according to Jacques Nel, head of Africa macro at NKC. “Markets are now open to lending to many sub-Saharan African sovereigns, which could provide the necessary fiscal breathing room in 2021.”

But official Ethiopian projections for annual economic growth of 8.4% are dismissed by Erasmus. NKC predicts growth of 2.2% given the “dire fiscal position and balance of payments risks.”

“The near-term outlook is clouded by political tensions ahead of the June election, reputational risks related to armed conflict in Tigray, an upsurge in desert locust infestation and forex shortages,” Erasmus writes.

That means the long-awaited liberalisation of Ethiopia’s high-potential sectors such as telecommunications and banking is now urgent. This would be the “crucial first step in addressing structural vulnerability and lowering government debt dependence,” Erasmus argues.

Read more »

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UPDATE: Ethiopia May Engage Private Creditors After Debt Review

Ethiopia is looking to offset the impact of the pandemic on its economy. (Getty Images)

Bloomberg

Updated: February 2nd, 2021

Ethiopia may approach private creditors for debt talks after it reviews liabilities with official lenders amid security risks that are adding to investors’ worries.

The nation’s Eurobonds plunged the most on record last week after State Minister of Finance Eyob Tekalign said the government will seek to restructure its external debt under a Group of 20 debt-suspension program. With no details on how the decision would affect holders of Ethiopia’s $1 billion of 2024 Eurobonds, many investors responded by selling the securities.

Only after talks involving official creditors, which the International Monetary Fund is assisting with, will the government be able to inform other creditors on the “need for broader debt treatment discussions,” the finance ministry said in a press statement on Monday.

Yields on Ethiopia’s $1 billion of 2024 Eurobonds climbed 26 basis points to 8.85% by 1:50 p.m. in London after jumping 207 points on Friday to the highest since May. The premium investors demand to hold the nation’s dollar bonds rather than U.S. Treasuries widened 31 basis points to 807, compared with the 538 average for African sovereign issuers, according to JPMorgan Chase & Co. indexes.

“In theory, a common framework should speed up the debt restructuring process, but it remains to be tested,” Morgan Stanley & Co. analysts Jaiparan Khurana and Simon Waever said in a note. “Questions around enforceability of the MoU terms to the private sector still persist, especially considering that the private sector is not a signatory.”

Ethiopia is the second African country after Chad to announce plans to review debt under the G-20 common framework, which aims to include China and private lenders into a global debt-relief push.

Ethiopia, like other African nations, is looking to offset the impact of the coronavirus pandemic on its economy. Ethiopia’s position is, however, exacerbated by fighting in the northern Tigray region and a border dispute with Sudan that’s threating to further destabilize the region.

“Possible implementation of the debt treatment under the Common Framework will address the debt vulnerabilities of the country, while preserving long-term access to international financial markets,” the finance ministry said in the statement. That will help in “unlocking more growth potential,” it said.

As with earlier bilateral debt relief, including via the Paris Club, Eurobond holders can choose not to participate in the program, according to the Morgan Stanley analysts. “The key issue would be how insistent bilateral creditors would be on the private sector participating,” they said.

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Related:

Ethiopia to Seek Debt Relief Under G20 Debt Framework – Ministry

Under the new G20 framework, debtor countries are expected to seek an IMF programme to steer their economies back to a firmer ground and negotiate a debt reduction from both public and private creditors.(Getty Images)

Reuters

Updated: January 30th, 2021

Exclusive: Ethiopia to seek debt relief under G20 debt framework – ministry

Ethiopia plans to seek a restructuring of its sovereign debt under a new G20 common framework and is looking at all the available options, the country’s finance ministry told Reuters on Friday.

G20 countries agreed in November for the first time to a common approach for restructuring government debt to help ease the financial strain of some developing countries pushed towards the risk of default by costs of the coronavirus crisis.

Chad became on Wednesday the first country to officially request a debt restructuring under the new framework and a French finance ministry told Reuters on Thursday that Zambia and Ethiopia were most likely to follow suit.

Asked if Ethiopia was looking to seek a debt restructuring under the G20 framework, Finance Ministry spokesman Semereta Sewasew said: “Yes, Ethiopia will look at all available debt treatment options under the G20 communique issued in November.”

Ethiopia’s government bond due for repayment in 2024 which it issued back in late 2014 saw its biggest ever daily fall. It plunged 8.4 cents on the dollar from roughly par to just under 92 cents.

Ethiopia is already benefiting from a suspension of interest payments to its official sector creditors through the end of June under an initiative between the G20 and the Paris Club of creditor nations.

Under the new G20 framework, debtor countries are expected to seek an IMF programme to steer their economies back to a firmer ground and negotiate a debt reduction from both public and private creditors.

—

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Developing Telecoms

The World Bank has confirmed plans to invest $200 million into Ethiopia’s digital economy as the country liberalises its telecoms market, but has cautioned that policies aimed at encouraging new entrants to lease infrastructure from Ethio Telecom could prove counterproductive.

Ousmane Dione, World Bank country director for Eritrea, Ethiopia, South Sudan and Sudan, warned that deployments could stall if new operators were pushed to lease infrastructure from Ethio Telecom rather than independent tower firms, arguing that it would be best if market entrants were able to “make rational decisions whether to build their own infrastructure.”

“To benefit fully from competition does not mean offering preferential treatment to Ethio Telecom but rather creating a level playing field on which it can compete fairly with its new rivals,” argued Dione. He noted that rural areas could be particularly badly affected.

Ethio Telecom has long held a monopoly in the market, with the bidding process for two new universal licences currently underway as Ethiopia moves towards opening up its telecoms sector. Operator groups including Etisalat, MTN, Orange, STC and a consortium headed by Vodafone are competing for the licences.

However, Dione noted that regulations governing the construction of private infrastructure and restricting foreign ownership of finance providers would be damaging both to new entrants seeking to set up financial offerings as well as Ethio Telecom.

“Ultimately, policies that seek to protect Ethio Telecom’s infrastructure by allowing it to charge high prices for interconnection will end up harming the company,” added Dione.

The country manager elaborated further on the World Bank’s pledge to invest $200 million into the market via the new Digital Ethiopia Foundations project, saying the strategy was aimed at creating “the legal and regulatory building blocks for the digital ecosystem, in areas like e-commerce and Digital ID.”

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Related:

UPDATE: Ethiopia Extends Deadline for New Telecom License Bids by a Month

Ethiopia’s telecoms industry is considered the big prize in a push to liberalize the economy because of the huge size of the market, which serves more than 100 million people. (Photo: Ethio Telecom)

Reuters

Updated: February 2nd, 2021

Ethiopia has extended the deadline for telecom firms to bid for new operating licenses by a month to April 5, the sector regulator said on Monday, citing requests from interested companies.

The Horn of Africa nation’s telecoms industry is considered the big prize in a push to liberalize the economy because of the huge size of the market, which serves more than 100 million people.

Prime Minister Abiy Ahmed is pressing ahead with the auction of the new licenses and the sale of a 45% stake in state monopoly Ethio Telecoms, in spite of a military conflict in the northern Tigray region.

Firms will be required to submit their technical and financial bids by April 5, compared with a previous deadline of March 5, the Ethiopian Communications Authority said in a statement.

Winners will be given full operating licenses, but they will not be allowed to offer mobile phone-based financial services, government officials said last year.

They will also be required to set up their own network infrastructure, such as cellphone towers, they said.

Kenya’s top operator Safaricom, which has expressed an interest in a consortium with Vodafone and Vodacom, estimated in 2019 it would have to pay about $1 billion for a new license.

Other firms that have expressed an interest include South Africa’s MTN, Etisalat from the United Arab Emirates and France’s Orange SA.

—

Related:

Ethiopia Telecom Reports 12% Rise in H1 Revenue

The government said last year it will retain a 55% stake in Ethio Telecom, with 40% going to international companies and the remainder to local investors. (Reuters photo)

Reuters

Updated: January 22nd, 2021

State-run Ethio Telecom, expected to be partly sold off as Ethiopia liberalises its economy, reported a 12% rise in first-half revenue to end-December to 25.6 billion birr ($650 million), it said on Thursday.

The government said last year it will retain a 55% stake in Ethio Telecom, with 40% going to international companies and the remainder to local investors.

Ethio Telecom said mobile voice services contributed 49% of the revenue and data services some 26%.

The company plans to launch mobile money services soon, it said, but did not give a timeframe.

In June, the telecoms regulator said it had received 12 bids for two telecom licences the government plans to award to multinational companies.

The regulator has not given a deadline for when it will award the licences.

Ethiopia’s telecoms industry is considered the big prize in a push to liberalise the economy as a protected market which serves more than 110 million people.

($1 = 39.3650 birr)

—

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Jacksonville Free Press

As an immigrant from Ethiopia, Washington, D.C., businessman Yimaj “Steve” Kalifa is living the American Dream, having built a personal wealth estimated at $100 million. Now at a time when COVID-19 has struck nearly 38,000 residents of the District and killed more than 900, Kalifa is paying back to the community that helped him build his fortune.

At the urging of a friend with connections to Mayor Muriel Bowser’s office, one of Kalifa’s companies, Capital Medical Supply Inc., donated 30,000 pieces of personal protection equipment to a Howard University virus testing center.

The friend was Armstrong Williams, political commentator and chief executive officer of Howard Stirk Holdings.

“It’s really sad what’s going on, so I really wanted to do something for the community that’s given so much to me,” said Kalifa, 53. “So, Armstrong called me and said, ‘Let’s buy these masks.’ He reached out to the city, which reached out to Howard’s Unity Clinic, and that’s how it happened.”

With a $1 million grant awarded in 2020, Howard University launched a testing site in the impoverished neighborhood of Benning Road Northeast, whose residents are disproportionately affected by pre-existing health conditions that make them susceptible to the novel coronavirus.

The site, which offers free testing four days a week to walk-ins, was impacted by a citywide shortage of personal protective equipment.

“The donation was very helpful at a time when the use of masks was critical to helping to curb the spread of the virus, especially in the minority community,” said Hugh E. Mighty, M.D., dean of the Howard University College of Medicine and vice president for clinical affairs. “We are grateful to Mr. Kalifa and Mr. Williams for their generous donations and support of the community.”

The site is now providing COVID-19 vaccinations, and will extend the program as more vaccine doses become available, Mighty said. Citywide, 83,125 doses have been delivered, with 62,219 administered as of the end of January, according to a monthly COVID-19 situational report released by Bowser’s office.

An additional 10,975 doses are expected to be delivered this week.

Although he incurred a personal cost of about $100,000, Kalifa said it was Williams’ connection to the mayor that made the personal protective equipment donation possible.

“I don’t have her cellphone number; he does,” Kalifa said. “So, he definitely gets credit for that.”

Building his empire

A self-described serial entrepreneur, Kalifa entered the business world in 2006, traveling to more than 20 states opening branches of a home health care company owned by three doctors and based in his adopted hometown of Los Angeles.

“On one trip, I went to Allentown, Pennsylvania, when the property owner offered to sell me the whole building for $30,000,” Kalifa said. “Coming from LA, that was a great price. That was the first property I purchased. But, from that point, in every state that I purchased a property, I leased it back to the three doctors. It was a lot of work starting out on my own, but that was the start of Capital View General Construction Inc.”

CVGC (doing business as Mitchell Heating and Cooling) is now a multimillion-dollar company specializing in commercial construction, road construction, residential construction and renovation projects in Denver and Colorado Springs, Colorado, and Washington, D.C.

CVGC and Mechanical Solutions Inc., a Denver-based heating, ventilation and air conditioning company, make up the bulk of Kalifa’s business portfolio. He also operates Capitol Medical Supply Inc., a durable medical equipment company in the District, and Source Cuisine, which, in 2019, outbid the former owner of Taylor Gourmet in a bankruptcy auction to reopen four locations of the popular D.C. sandwich shop.

Medical staff at Howard University give a Covid-19 vaccination dose. (Tasos Katopodis/Getty Images)
Opposites attract

Williams, 59, a black conservative commentator and owner of several television stations through his company, is known for a brand of rhetoric that often runs counter to voices on the American left. He met Kalifa about 10 years ago at the Congressional Black Caucus dinner. He acknowledges that he and Kalifa agree on little besides a mutual interest in building their respective business holdings.

“We have opposing views, but we have a civil discourse,” said Williams. “We agree on business, and we learn from each other. But, if everybody agreed with everybody, somebody’s not necessary.

“My first impression on meeting Steve was that he is very free, he’s truly free. We can agree on legal, moral and ethical things; I respect that. He’s built the $100 million health care and real estate portfolio around the world that he always wanted to. Steve’s a great guy; he’s my brother.”

—

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The Washington Post

Ethiopian dining is as much about community as food. The pandemic has changed that, for now.

A businessman from Addis Ababa has dined on occasion during the pandemic at Nazret Ethiopia Restaurant (3821 S George Mason Dr. D, Falls Church, 703-347-9911; nazretethiopiarestaurant.com). The man — who is quite wealthy, says chef-owner Endalkachew Mekonnen — usually requests a spot in the corner of the dining room and politely asks the proprietor to keep the tables around him clear of other customers. He tries to eat early in the evening, or later at night, to avoid what passes for a crowd during the coronavirus pandemic.

“He tells me I can charge him any amount but usually we don’t charge him” for the special accommodation, Mekonnen says. Instead, the businessman tips well, frequently handing the owner a C-note for his troubles.

Say what you want about the entitlement of the rich and their ability to bend the world to their will with the flash of a little cash. But when it comes to the warmth, culture and exchange of the Ethiopian table, this businessman is as bereft as the rest of us. The pandemic has cast its shadow over our lives for almost a year now, and it has been particularly cruel to the restaurant industry. I’d argue, though, that few cuisines have suffered as much as the one from East Africa — the one that’s so prominent on the streets of Washington and in many of its suburbs.

Chef-owner Endalkachew Mekonnen at Nazret. (The Washington Post)

Read more »

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Reuters

Ethiopia has extended the deadline for telecom firms to bid for new operating licenses by a month to April 5, the sector regulator said on Monday, citing requests from interested companies.

The Horn of Africa nation’s telecoms industry is considered the big prize in a push to liberalize the economy because of the huge size of the market, which serves more than 100 million people.

Prime Minister Abiy Ahmed is pressing ahead with the auction of the new licenses and the sale of a 45% stake in state monopoly Ethio Telecoms, in spite of a military conflict in the northern Tigray region.

Firms will be required to submit their technical and financial bids by April 5, compared with a previous deadline of March 5, the Ethiopian Communications Authority said in a statement.

Winners will be given full operating licenses, but they will not be allowed to offer mobile phone-based financial services, government officials said last year.

They will also be required to set up their own network infrastructure, such as cellphone towers, they said.

Kenya’s top operator Safaricom, which has expressed an interest in a consortium with Vodafone and Vodacom, estimated in 2019 it would have to pay about $1 billion for a new license.

Other firms that have expressed an interest include South Africa’s MTN, Etisalat from the United Arab Emirates and France’s Orange SA.

—

Related:

Ethiopia Telecom Reports 12% Rise in H1 Revenue

The government said last year it will retain a 55% stake in Ethio Telecom, with 40% going to international companies and the remainder to local investors. (Reuters photo)

Reuters

Updated: January 22nd, 2021

State-run Ethio Telecom, expected to be partly sold off as Ethiopia liberalises its economy, reported a 12% rise in first-half revenue to end-December to 25.6 billion birr ($650 million), it said on Thursday.

The government said last year it will retain a 55% stake in Ethio Telecom, with 40% going to international companies and the remainder to local investors.

Ethio Telecom said mobile voice services contributed 49% of the revenue and data services some 26%.

The company plans to launch mobile money services soon, it said, but did not give a timeframe.

In June, the telecoms regulator said it had received 12 bids for two telecom licences the government plans to award to multinational companies.

The regulator has not given a deadline for when it will award the licences.

Ethiopia’s telecoms industry is considered the big prize in a push to liberalise the economy as a protected market which serves more than 110 million people.

($1 = 39.3650 birr)

—

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ABC 7 News

Activists Rally to Save Ethiopian Coffee Shop in Bronx

RIVERDALE, Bronx (WABC) — An Ethiopian coffee shop in the Bronx has become the center of a cry for help to save small businesses in danger of closing amid the pandemic.

The owners of Buunni Coffee say they will have to close by the end of January because they can’t meet their landlord’s rent demands.

Activists are calling on state and city lawmakers to pass already proposed legislation to help businesses like Buunni survive.

“Small businesses faced serious problems before COVID, and now the pandemic has brought us to a breaking point,” Sarina Prabasi, co-founder of Buunni Coffee, said. “This is not about any one business. It’s beyond time to create bold, comprehensive support for the smallest of businesses and our workers. We have an opportunity to address long-standing inequities, to level the playing field and to invest in our neighborhoods for the long term. But this will take courage and political will from our elected representatives.”

Those at the rally said Buunni has been a vital part of the neighborhood, a center for local activism, art, and music for the past three years.

“Immigrant-owned small businesses, such as Buunni Coffee, have become one of the biggest casualties of the COVID-19 pandemic with them closing at an alarming rate all across the City, including The Bronx,” Sen. Gustavo Rivera said. “The federal government’s inaction has left hard working businesses owners such as Ms. Prabasi at risk of losing their livelihoods and our borough in danger of a deeper economic crisis. I join local leaders and Riverdale residents in calling on our local government to fill the void left by Washington and enact legislation that will help businesses like Buunni Coffee to remain open and successfully recover from this unprecedented crisis.”

—

Related:

From the Birthplace of Coffee Cafe Buunni Serves Ethiopian Organic Specialty Coffee

Join the conversation on Twitter and Facebook.

Reuters

Paris Club of creditors: Ethiopia gets debt deadline extension

PARIS (Reuters) – Ethiopia will get a deadline extension for its debts, with a new deadline set at June 30, 2021, said the Paris Club of international creditors on Thursday.

The members of the Paris Club involved in the reorganisation of Ethiopia’s debts are France, Italy, Japan, the Republic of Korea and the Russian Federation.

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Ethiopia says national election to be held in June

By Reuters Staff

ADDIS ABABA (Reuters) – Ethiopia will hold a parliamentary election on June 5, the electoral board said on Friday, as Prime Minister Abiy Ahmed seeks to quell political and ethnic violence in several regions.

Abiy’s Prosperity Party, a pan-Ethiopian movement he founded a year ago, faces challenges from increasingly strident ethnically-based parties seeking more power for their regions.

Africa’s second most populous nation has a federal system with 10 regional governments, many of which have boundary disputes with neighbouring areas or face low-level unrest.

In the northern Tigray region, thousands of people are believed to have died and 950,000 have fled their homes since fighting between regional and federal forces erupted on Nov. 4. Tigray held its own elections in September in defiance of the federal government, which declared the polls illegal.

The National Electoral Board said next year’s calendar for polls did not include an election in Tigray. It said the date for a Tigray vote would be set once an interim government, which was established during the conflict, opened election offices.

The national vote was postponed from August this year due to the coronavirus crisis. The head of the winning party becomes prime minister.

For nearly three decades until Abiy’s appointment, Ethiopia was ruled by a coalition of four ethnically-based movements dominated by the party from Tigray. That administration ruled in an increasingly autocratic fashion until Abiy took power in 2018 following years of bloody anti-government street protests.

The initial months after Abiy’s appointment saw a rush of political and economic reforms, including the release of tens of thousands of political prisoners.

‘RESTORING PEACE’

Abiy merged three of the main regional parties last year to form the Prosperity Party. The fourth, the Tigray People’s Liberation Front (TPLF), refused to join.

Voter registration for the June vote would take place from March 1 to 30, the electoral board said.

Abiy’s peace deal with Eritrea, which won independence from Ethiopia in 1993 after years of conflict, helped earn him the Nobel Peace Prize in 2019. But his moves to loosen the Ethiopian government’s iron grip was followed by outbreaks of violence as regional politicians and groups jostled for resources and power.

Abiy ordered troops to the western Benishangul-Gumuz region, which borders Sudan, on Thursday after attackers torched homes and killed more than 200 people in a village.

—

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The Wall Street Journal

By Marcus Samuelsson

The owner and chef of Red Rooster says Covid-19 has forced a rethinking of the business

This year, the restaurant industry was flipped on its head. Covid-19 disrupted our way of life, throwing everyone in the supply chain—from the farmers who grow our food to the chefs who turn it into the masterful dishes that end up on our plates—into a season of disarray and fear.

Nearly 100,00 restaurants were shut down across the country, and here in my city of New York, more than 1,000 restaurants—some of which had served New Yorkers for decades—closed permanently.

The painful losses of Covid-19 also affected us restaurateurs on a personal level. My friend and colleague Floyd Cardoz was one of the first prominent chefs to pass from the virus. Countless other chefs, cooks and servers also suffered from the virus, forcing us all to come to terms with the fragility that is life, and the importance of using every day as my friend Floyd did: to make this industry, and our world, a better place.

This revelation is one of the most important and motivating outcomes of Covid-19. In New York, while restaurant owners navigated managing a restaurant during unfathomable circumstances, many also worked to serve the community. At Red Rooster, we joined with World Central Kitchen to feed everyone in need: schoolteachers, construction workers, cooks, servers, health-care workers, Harlem youth facing food insecurity, and other vulnerable communities, throughout the shutdown. What it means to be a part of and in service to your community has radically changed during this pandemic.

It has also changed how guests and restaurant workers interact with one another. The essential labor that so many diners never noticed before became visible, as did the inequalities that pervade the American food system. Patrons were forced to confront the importance and significance of restaurants in their lives, and across the nation, while leading chefs are rethinking the role of the restaurant—from what we represent in our communities to how our institutions can provide comfort and community, whether in person at a smaller capacity, or through delivery services.

For us, the future of our industry is centered on the environment and sustainability, race and identity, and human rights and dignity for all. The restaurant has long served as a place where humans from every corner of the Earth could come together to discuss such topics. This year, however, the pandemic has imposed a new framework: How do we remain a place where folks can celebrate life’s pleasures, discuss difficult issues and enjoy incredible meals, when we ourselves are struggling?

The pandemic has forced the food industry to confront key issues of racism and power, such as how immigrants and people of color are often the backbone of America’s most prominent restaurants, yet are often paid and treated inequitably. In my new book, “The Rise: Black Cooks and the Soul of American Food,” we share recipes that reflect a transition from pain to glory. Though African-American chefs have been underrepresented and underappreciated in food media, their recipes and skill set are deeply embedded in the fabric of American cooking. Just as there’s no American history without Black Americans, there’s no food or future without us, either.

Our ability to create flavorful, comforting food in the face of continuing injustice and global challenges demonstrates that beauty can emerge alongside pain. However, there is no need for that sort of pain and injustice to continue. As the U.S. prepares for a new administration, the onus falls upon the incoming government to lead and support an industry that has thrived through struggle, yes, but deserves financial support that allows our industry to survive, grow and innovate. A better, tastier world can exist for all of us, along with a more equitable, kinder society.

As we look to a new year, I find myself in remembrance of those we’ve lost, thankful for community and hopeful for the change that will come as a result of the hard but essential lessons that have come from such a significant year. I’m encouraged by how our society and food industry have come together to build better, more equitable food systems and practices. Many of us have demanded more respect for farmers, particularly farmers of color, and we’ve spoken in support of restaurants that are safer, more just environments for women, queer people and people of color.

I’ve watched as major food corporations work to diversify their staff and create opportunities for new voices to lead in the industry. I’ve seen longtime chefs create culinary masterpieces amid unpredictable circumstances, bringing joy and full stomachs to their patrons. I’ve watched restaurants, including family-owned businesses and Michelin-starred restaurants, do everything in their power to serve thoughtful, hearty food to people who need meals. I’ve also seen our own industry organize through the Independent Restaurant Coalition to fight for the things our businesses need to survive from our government.

We, like so many others in this country, are demanding change and support. While it’s clear that some lawmakers are indeed listening, there is still much ground-level work to be done, and I’m hopeful that industry leaders, young activists and the patrons we love serving in our restaurants will continue pursuing this mission of change.

These national efforts lead me to believe that not only will our industry survive the impact of this monumental year, but we will be a better, more connected and more supportive group of culinary leaders. In the new year and years to follow, I foresee an industry that is led by women and people of color, and that amplifies the culinary expertise of the many cultures that have influenced American cuisine as we know it.

I hope to see more respect for everyone involved in the restaurant industry, from those working the dishwashers, to the farmers who lovingly grow and harvest our food, to the chefs and line cooks—many of whom increasingly struggle with mental-health challenges from the stressors of restaurant work—who are responsible for feeding millions of Americans each and every day. I look forward to a vibrant and thriving industry that takes nothing, especially the people we serve, for granted.

This year has challenged and changed us deeply, but it’s also exposed our most human capacity: to rise, with gumption, change and hope.

—

Related:

Marcus Samuelsson Named Guest Editor of Bon Appétit Magazine

Join the conversation on Twitter and Facebook.

Bloomberg

By Simon Marks and Samuel Gebre

Long-Isolated Ethiopia To Take Major Step to Open Phone Market

Ethiopia will start accepting proposals for two new telecommunication licenses from Friday, a major step toward opening Africa’s second-most populous country to international operators.

Eyob Tekalign, the state minister responsible for the privatization process, confirmed the move even as the government wages a military conflict in the country’s northern Tigray region.

Ethiopia has been looking to auction the licenses since mid-2018, though the complexity of the process and challenges such as the Covid-19 pandemic have caused a series of delays. MTN Group Ltd., Africa’s largest carrier by subscribers, said last week it sees the investment case weakening due to uncertainty over whether international tower companies would participate and a mobile-money license be included.

Operators will be informed on Friday about the terms of the auction and what the government expects from them in terms of financial and technical offerings.

South Africa’s Vodacom Group Ltd. has said it’s monitoring the conflict between the government and Tigray before making its final decision, having earlier said it would bid in a consortium with Vodafone Group Plc and Kenya’s Safaricom Plc. Orange SA is another to have expressed an interest.

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Ethiopia: 45% of telecoms company Ethio to be sold off, despite conflict in the north

Privatising the Ethiopian telecoms sector should bring lower prices for users. (Photo: SIPA)

The Africa Report

Privatising the Ethiopian telecoms sector should bring lower prices for users/Caro/Trappe/SIPA
Foreign investors are queuing up to invest in Ethiopia’s telecoms sector, which will soon bid adieu to the state monopoly. However, the rules of the road are not yet clear, and conflict in the north may put things on hold.

The privatisation of the Ethiopian state’s monopoly on the telecoms sector – the last on the continent – is crucial to Prime Minister Abiy Ahmed’s liberalisation agenda and to attracting foreign investment as the country opens up. The government is preparing to sell a 45% stake in Ethio Telecom to investors and to issue two new telecoms licences, even as the current war against the Tigray region continues.

“It is 40% to all interested bidders and 5% will be dedicated to Ethiopians. The 55% will remain with the government of Ethiopia”, an advisor to the minister of finance told Reuters. It should occur within the next nine months hope officials, though analysts have been more cautious, given that the war in the north has seen swathes of the national communications network silenced.

If the privatisation is successful, it should lead to billions of dollars of investment in the sector, a rapid drop in prices and competition to deliver speedy internet and other services.

With a population of 109.2 million and increasing needs in information and communications technology (ICT), the country represents a huge and growing market for potential investors. The number of mobile users alone rose by 7.2 million, or 18%, between January 2019 and 2020, bringing the total to 46.8 million.

There is a largely untapped market, a willing government and big demand, so what could go wrong? A civil conflict that sets the northern Tigray region against the centre is certainly not the noise that investors like.

In addition, there has been policy fluctuation. Confusion ensued after recent reports from news outlets announcing the barring of foreign companies from participating in the ­infrastructure side of the telecoms market.

When the liberalisation was announced, foreign operators including Orange, Vodacom, Safaricom and MTN, and telecom infrastructure companies like Helios Towers expressed interest. Ethio Telecom has been adamantly opposed to the latter’s potential entry into the market and was ultimately supported on this by the Ethiopian government.

It is, however, unclear how long the ‘home team’ will be able to affect regulation in the face of opposition from the Ethiopian Communications Agency (ECA), the sector’s new regulator. Having invested massively in infrastructure, Ethio Telecom fears the competition if all aspects of the sector are liberalised. Following a meeting with key stakeholders in the sector on 7 September, Abiy confirmed plans to go ahead with the opening-up process.

Leasing of infrastructure

The new draft licensing directive from the ECA sets out plans for the lease of the existing infrastructure to the newly licensed operators, and in the long term would create the possibility for the operators to build their own. This could be an important source of revenue for Ethio Telecom, especially in the first few years, while operators set up their infrastructure.

ECA director Balcha Reba told reporters that there should be several access options for new entrants: “sharing from existing infrastructure, having a tower company (infraco/ third party) providing infrastructure, an infrastructure-sharing agreement between the new entrants, […]or building your own infrastructure”.

He also cautioned that there might be “technical limitations” as “existing masts may not have been designed to cater to the additional load”. The government is currently assessing Ethio Telecom’s infrastructure capacity with the help of the consultants at Deloitte. The ECA’s upcoming directives are expected to clarify the way forward.

A source close to Ethio Telecom tells The Africa Report the parastatal is upgrading its infrastructure and implementing reforms to prepare for competition. The company has split its network infrastructure into five and has separated its technical department from its service departments for greater efficiency. Things seem to be looking up, with a 34% increase in profits announced for the first six months of the 2019 budget year. This could be the driving force behind the new tariff cuts on internet and voice calls.

It is not yet clear which companies will bid for the Ethio Telecom stake. However, “the infrastructure projects currently under way are using Chinese-manufactured technology, including from Huawei. We should let the operators bring compatible material, especially in the context of the US sanctions on Huawei,” the source said.

Ethiopian telecoms specialist Terrefe Ras-Work argues that the privatisation “timing is off”. “We first need economic and political stability. […] If we are selling because of debt, let’s at least do it at a better time.” Covid-19 and the country’s debt are slowing economic growth and elections scheduled for October have since been postponed.

Alexander Demissie, the founding director of the China Africa Advisory, points out that “it is too late [to delay the liberalisation]. Ethio Telecom has borrowed $3.1bn from China to build its infrastructure and has only paid a small portion.”

No cash cow

Consultant Fentaw Abitew issued a warning to potential investors in Ethio Telecom, saying ‘There is a myth – and it is a myth – that Ethio Telecom is a cash cow providing positive annual revenue.’ She went on to say that, despite the Chinese loan for infrastructure, ‘services have remained terrible’.

The 12 expressions of interest that the government received by June for the two new licences included those from the Global Partnership for Ethiopia (a consortium composed of Vodafone, Vodacom and Safaricom), the Emirati company Etisalat, Madagascar’s Axian, South Africa’s MTN, France’s Orange, Saudi Telecom Company, South Africa’s Telkom and Zimbabwe-based Liquid Telecom. So far it is the heavyweights – Vodafone and partners, Etisalat, MTN, Orange and Saudi Telcom – who are seen as having the best chance of winning.

They, and those that will bid for a stake in Ethio Telecom, will be watching eagerly as the battles over the future of the sector are fought out by the different players in the administration and telecoms ecosystem.

—

Join the conversation on Twitter and Facebook.

Yelp

By Helina Wolde Medhin, Senior Community Director II, Yelp Los Angeles

Ethiopia. Birthplace of coffee. Source of the (Blue) Nile. Home to ancient archaeological treasures. There are so many unique aspects that make up the rich culture and history of this diverse, never-colonized East African nation. But perhaps the most universally celebrated feature that connects Ethiopia to the world is its deliciously distinctive colorful cuisine.

Top 100 Ethiopian Restaurants in the U.S. According to Yelp Methodology:

We identified businesses in the Ethiopian category, then ranked those spots using a number of factors including the total volume and ratings of reviews between January 1, 2015 and July 20, 2020. When available, all businesses on this list have a passing health score as of July 2020.

Shebelle Ethiopian Cuisine & Bar (Dallas, TX) – Shebelle E

1. GS Cafe and Ethiopian Cuisine (Covina, CA)
2. Selam Ethiopian & Eritrean Cuisine (Orlando, FL)
3. Enat Ethiopian Restaurant (Charlotte, NC)
4. St Yared Ethiopian Restaurant (Indianapolis, IN)
5. Abugida Ethiopian Cafe & Restaurant (Charlotte, NC)
6. Shewhat Addis Restaurant (Oakland, CA)
7. Addis Restaurant (San Diego, CA)
8. Derae Restaurant (Memphis, TN)
9. Lucy Ethiopian Restaurant & Lounge (Houston, TX)
10. Enatye Ethiopian Restaurant (Herndon, VA)

Read the full list at blog.yelp.com »

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Join the conversation on Twitter and Facebook.

Reuters

Updated: October 5th, 2020

ADDIS ABABA (Reuters) – Ethiopia’s giant new hydropower dam on the Blue Nile will begin generating power in the next 12 months, the country’s president said on Monday.

“This year will be a year where the Grand Ethiopian Renaissance Dam will start generating power with the two turbines,” Sahle-Work Zewde said in a speech to parliament.

Ethiopia is locked in a dispute with Egypt and Sudan over its $4 billion Grand Ethiopian Renaissance Dam, which Cairo has said could threaten its main supply of water.

Ethiopia bans flights over dam for security reasons – aviation chief

Reuters

Updated: October 5th, 2020

By Dawit Endeshaw

ADDIS ABABA (Reuters) – Ethiopia has banned all flights over its giant new hydropower dam on the Blue Nile for security reasons, the head of its civil aviation authority said on Monday, as the president pledged the dam would begin generating power in the next 12 months.

The move could worsen Ethiopia’s dispute with Egypt and Sudan over its $4 billion Grand Ethiopian Renaissance Dam, which Cairo has said could threaten its main supply of water.

“All flights have been banned to secure the dam,” the director-general of the Ethiopian Civil Aviation Authority, Wesenyeleh Hunegnaw, told Reuters by phone. He declined to give more details on the reasons.

Later on Monday in a speech to parliament, Ethiopia’s president Sahle-Work Zewde said: “This year will be a year where the Grand Ethiopian Renaissance Dam will start generating power with the two turbines.”

She also said that work was underway to enable a second filling of the dam within the next 12 months.

In July, Ethiopia said it had achieved its first year of filling the dam thanks to rainfall in the area.

Ethiopian Prime Minister Abiy Ahmed told the United Nations last month that the country has “no intention” of harming Sudan and Egypt with the dam, days after Egyptian President Abdel Fattah al-Sisi reiterated his concerns over the project.

Last week, air force chief Major General Yilma Merdasa told local media that Ethiopia was fully prepared to defend the dam from any attack.

Ethiopia, Egypt and Sudan failed to strike a deal on the operation of the Grand Ethiopian Renaissance Dam before Ethiopia began filling the reservoir behind the dam in July.

The dam is at the centre of Ethiopia’s bid to become Africa’s biggest power exporter.

The structure is about 15 km (9 miles) from the Ethiopian border with Sudan on the Blue Nile – a tributary of the Nile river, which gives Egypt’s 100 million people about 90% of their fresh water.

The United States decided last month to cut $100 million in aid to Ethiopia amid the dispute over the dam. A U.S. State Department official who did not want to be identified told Reuters at the time that the decision to pause some funding to Ethiopia was triggered by concern over Ethiopia’s unilateral decision to start filling the dam before an agreement.

—

Related:

UPDATE: Ethiopia-Egypt War Over GERD Has Already Started. It’s in Cyberspace

Workers move iron girders from a crane at the Grand Ethiopian Renaissance Dam. (Getty Images)

Foreign Policy

SEPTEMBER 22, 2020, 6:41 AM

The conflict between Ethiopia and Egypt over the Grand Ethiopian Renaissance Dam has already started. It’s just happening in cyberspace.

It took only a few weeks to plan the cyberattack—and a few more to abandon the world of ethical hacking for the less noble sort. But they would do anything for the Nile, the four young Egyptians agreed.

With that, the group calling themselves the Cyber_Horus Group in late June hacked more than a dozen Ethiopian government sites, replacing each page with their own creation: an image of a skeleton pharaoh, clutching a scythe in one hand and a scimitar in the other. “If the river’s level drops, let all the Pharaoh’s soldiers hurry,” warned a message underneath. “Prepare the Ethiopian people for the wrath of the Pharaohs.”

“There is more power than weapons,” one of the hackers, who asked not to be identified by name, told Foreign Policy. Also, it was a pretty easy job, the hacker added.

A few weeks later and thousands of miles away, a 21-year-old Ethiopian named Liz applied red lipstick and donned a black T-shirt and jeans. She positioned her phone on her desk and started her own kind of online influence campaign: a TikTok video. She danced to a popular Egyptian song underneath the message, “Distracting the Egyptians while we fill the dam.”

“There’s no other country that can stop us,” said Liz, who has more than 70,000 followers on the app and whose taunting video was met with praise and threats. “It’s our right.”

Rarely have young people been so passionate about an infrastructure project. But the Grand Ethiopian Renaissance Dam, which will be Africa’s largest, is more than just a piece of infrastructure. It has become a nationalistic rallying cry for both Ethiopia and Egypt—two countries scrambling to define their nationhood after years of domestic upheaval. Many Ethiopians and Egyptians are getting involved in the only way they can—online—and fomenting the first African cyberconflict of its kind, one with far-reaching and long-lasting consequences.

Read more »

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Related:

Trump Administration Confirms Cutting Aid to Ethiopia Over GERD (UPDATE)

(Getty Images)

The Associated Press

Updated: September 2nd, 2020

It was an unusual example of Trump’s direct intervention on an issue in Africa, a continent he hasn’t visited as president and rarely mentions publicly.

On the guidance of President Trump, the State Department said Wednesday that the United States was suspending some aid to Ethiopia over the “lack of progress” in the country’s talks with Egypt and Sudan over a disputed dam project it is completing on the Nile River.

It was an unusual example of Mr. Trump’s direct intervention on an issue in Africa, a continent he hasn’t visited as president and rarely mentions publicly. The dam dispute centers on two of Africa’s most populous and powerful nations, Ethiopia and Egypt, and some have feared it could lead to military conflict.

A State Department spokesperson told The Associated Press the decision to “temporarily pause” some aid to a key regional security ally “reflects our concern about Ethiopia’s unilateral decision to begin to fill the dam before an agreement and all necessary dam safety measures were in place.”

It is not clear how many millions of dollars in aid are being affected, or for how long. The decision was taken by Secretary of State Mike Pompeo “based on guidance from the president,” the spokesperson said.

There was no immediate comment from Ethiopia’s government. Ethiopia’s ambassador to the United States, Fitsum Arega, this week tweeted that his country was determined to complete the dam, saying that “we will pull Ethiopia out of darkness.”

Africa’s largest hydroelectric dam has caused severe tensions with Egypt, which has called it an existential threat and worries that it will reduce the country’s share of Nile waters. Ethiopia says the $4.6 billion dam will be an engine of development that will pull millions of people out of poverty. Sudan, in the middle, worries about the effects on its own dams though it stands to benefit from access to cheap electricity.

Years of talks among the countries have failed to come to an agreement. Key remaining issues include how to handle releases of water from the dam during multiyear droughts and how to resolve future disputes.

The United States earlier this year tried to mediate the discussions, but Ethiopia walked away amid accusations that Washington was siding with Egypt. Now the three countries are reporting any progress to the African Union, which is leading negotiations.

Ethiopia had said it would fill the dam with or without a deal with Egypt and Sudan. The dam’s 74 billion-cubic-meter reservoir saw its first filling in July, which Ethiopia’s government celebrated and attributed to heavy rains, while a startled Egypt and Sudan hurriedly sought clarification and expressed skepticism.

A former U.S. ambassador to Ethiopia, David Shinn, had warned against an aid cut, writing that “playing political hardball with Ethiopia will not only fail to obtain Washington’s desired result but will probably ensure that the Ethiopian diaspora in the United States rallies against Trump.”

—

Related:

Cutting Aid to Ethiopia Haunts Trump in Election

David Shinn, a former US envoy to Ethiopia said playing political hardball with Ethiopia will not only fail to obtain the desired result but will probably ensure that the Ethiopian diaspora in the US will rally against Trump and spoil his chances in the close contest. “There are sizeable Ethiopian-American communities in key states such as Georgia, Texas, and Virginia,” he said. (Image: Tulsa World)

AA

Addis Getachew | ADDIS ABABA, Ethiopia

Updated: September 2nd, 2020

Ethiopian-Americans against US cutting $130M aid to Ethiopia to enforce Egypt friendly agreement on sharing Nile waters

The US has now formally stepped in, to support Egypt and punish Ethiopia over the river water sharing dispute between the two African countries.

Last week, the Trump administration announced blocking a $130 million aid that had been earmarked to support Ethiopia’s defense and anti-terrorism efforts.

Secretary of State Mike Pompeo signed the cut in aid, ostensibly to build pressure on Ethiopia, a rugged landlocked country in the Horn of Africa.

While it is not clear to what extent the US decision will affect Ethiopia, but it has united everyone in the country and the diaspora.

“We have officially requested the US administration that they give us an explanation,” said Ethiopia’s Ambassador to Washington Fitsum Arega, while taking to Twitter.

David Shinn, a former US envoy to Ethiopia said playing political hardball with Ethiopia will not only fail to obtain the desired result but will probably ensure that the Ethiopian diaspora in the US will rally against Trump and spoil his chances in the close contest. “There are sizeable Ethiopian-American communities in key states such as Georgia, Texas, and Virginia,” he said.

Ethiopian government led by Prime Minister Abiy Ahmed had earlier rejected an agreement brokered by the US Treasury Secretary Steven Mnuchin in February related to the filling and operation of the $5billion Grand Ethiopian Renaissance Dam (GERD). Ethiopia said the US proposal was heavily tilted towards Egypt.

Relations between Cairo and Addis Ababa have strained over recent times, over the filling and operation of the dam that has come upon the Blue Nile, one of the tributaries of the River Nile.

Since June, the African Union has been mediating now to evolve a win-win formula between Ethiopia, Sudan, and Egypt.

The AU has entrusted its Bureau of the Assembly of Heads of State and Government including South Africa, Kenya, Mali, and Democratic Republic of Congo (DRC) to prevent any escalation between these countries. The European Union, the World Bank, and the US continue as observers in the group.

Read more »

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Related:

Mike Pompeo is the Worst U.S. Secretary of State in History

Mike Pompeo’s handing of the Trump administration’s foreign policy “has led to some of the worst diplomatic damage the United States has suffered in decades — especially in relations with its closest allies,” writes The Washington Post’s Deputy editorial page editor and columnist Jackson Diehl. (Photo: The Washington Post)

The Washington Post

Updated: August 30, 2020

As secretary of state, Mike Pompeo has presided over the collapse of negotiations with North Korea, the failure of a pressure campaign against Iran and an abortive attempt to oust Venezuela’s authoritarian regime. On his watch, China has carried out genocide in its Xinjiang region and the suppression of Hong Kong’s freedoms without resistance from Washington until it was too late.

Pompeo has failed to fill dozens of senior positions at the State Department, and hundreds of career diplomats have left or been driven out in political purges. Morale is at a historic low: In staff surveys, there has been a 34 percent increase between 2016 and 2019 in those who say the State Department’s senior leaders “did not maintain high levels of honesty and integrity.” Maybe that’s because Pompeo himself has defied legal mandates from Congress, skirted a law restricting arms sales to Saudi Arabia, tasked staffers with carrying out errands for himself and his wife, and fired the inspector general who was investigating his violations.

Last week, Pompeo crossed yet another ethical line by speaking before the Republican National Convention, thereby disregarding the State Department’s explicit legal guidance against such appearances. The speech he delivered was weak and littered with false or simply ludicrous claims, such as that the recent diplomatic accord between Israel and the United Arab Emirates is “a deal that our grandchildren will read about in their history books.” Maybe if they major in Middle Eastern affairs.

With his ambitions likely fixed on a presidential candidacy in 2024, Pompeo is undoubtedly hoping most of the diplomatic disasters will ultimately be blamed on President Trump, especially if Trump loses the November election. But the former Kansas congressman should not get off so easy. Yes, it’s Trump’s foreign policy. But Pompeo’s steering of it has led to some of the worst diplomatic damage the United States has suffered in decades — especially in relations with its closest allies.

Read more »

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Related:

Pompeo approves plans to halt aid to Ethiopia over Nile dam dispute

Getty Images

The Hill

08/28/20

Secretary of State Mike Pompeo has approved plans to halt some U.S. aid to Ethiopia, Foreign Policy reported on Friday.

The halt in aid comes as the U.S. mediates a dispute over a dam on the Nile River that’s pitted Ethiopia against Egypt and Sudan, according to Foreign Policy. The decision could impact up to $130 million of assistance to programs including security, counter-terrorism and anti-human trafficking.

“There’s still progress being made, we still see a viable path forward here,” a U.S. official told the magazine. “The U.S. role is to do everything it can to help facilitate an agreement between the three countries that balance their interests. At the end of the day it has to be an agreement that works for these three countries.”

The State Department did not immediately respond to a request for comment from The Hill.

Ethiopia and Egypt are at a standstill in negotiations over how the dam on a tributary of the Nile will be managed.

Egypt and Sudan, which depend on the Nile for much of their fresh water, are opposed to any development they say will impact the flow downstream, including the 6,000-megawatt power plant Ethiopia hopes to develop at the dam.

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Is the Trump Administration Using Aid to Bully Ethiopia Over Nile Dam?

It’s too bad that the U.S. has decided to take the wrong side in a local African dispute regarding the Grand Ethiopian Renaissance Dam. As the following FP article reports the Trump administration is cutting off “some foreign assistance” to Ethiopia over GERD. The scheme may be intended to tip the scale in Egypt’s favor, but if history is any indication this kind of foreign intimidation does not work in Ethiopia. It’s also worth mentioning that the dam, a $4.5 billion hydroelectric project, is being fully funded by the Ethiopian people. (Getty Images)

Foreign Policy

U.S. Halts Some Foreign Assistance Funding to Ethiopia Over Dam Dispute with Egypt, Sudan, Some U.S. officials fear the move will harm Washington’s relationship with Addis Ababa.

Updated: AUGUST 27, 2020

Secretary of State Mike Pompeo has approved a plan to halt U.S. foreign assistance to Ethiopia as the Trump administration attempts to mediate a dispute with Egypt and Sudan over the East African country’s construction of a massive dam on the Nile River.

The decision, made this week, could affect up to nearly $130 million in U.S. foreign assistance to Ethiopia and fuel new tensions in the relationship between Washington and Addis Ababa as it carries out plans to fill the dam, according to U.S. officials and congressional aides familiar with the matter. Officials cautioned that the details of the cuts are not yet set in stone and the finalized number could amount to less than $130 million.

Programs that are on the chopping block include security assistance, counterterrorism and military education and training, anti-human trafficking programs, and broader development assistance funding, officials and congressional aides said. The cuts would not impact U.S. funding for emergency humanitarian relief, food assistance, or health programs aimed at addressing COVID-19 and HIV/AIDS, officials said.

The move is meant to address the standoff between Ethiopia and other countries that rely on the Nile River downstream that have opposed the construction of the massive dam project, called the Grand Ethiopian Renaissance Dam. Egypt sees the dam’s construction as a core security issue given the country’s heavy reliance on the river for fresh water and agriculture, and in the past Egyptian President Abdel Fattah al-Sisi has hinted his country could use military force to halt the dam’s construction.

Some Ethiopian officials have said they believe the Trump administration is taking Egypt’s side in the dispute. President Donald Trump has shown a fondness for Sisi, reportedly calling him his “favorite dictator” during a G-7 summit last year. Officials familiar with negotiations said the Trump administration has not approved parallel cuts in foreign assistance to Egypt.

Administration officials have repeatedly assured all sides that Washington is an impartial mediator in the negotiations, which mark one of the few diplomatic initiatives in Africa that the president has played a personal and active role in. These officials pointed out that Egypt has accused the United States of taking Ethiopia’s side in the dispute as well.

“There’s still progress being made, we still see a viable path forward here,” said one U.S. official. “The U.S. role is to do everything it can to help facilitate an agreement between the three countries that balance their interests. At the end of the day it has to be an agreement that works for these three countries.”

But the move is likely to face sharp pushback on Capitol Hill, according to Congressional aides familiar with the matter. State Department officials briefed Congressional staff on the decision on Thursday, the aides said, and during the briefing insisted that the U.S.-Ethiopia relationship would remain strong despite a cutback in aid because the United States can have tough conversations “with friends.”

“This is a really fucking illogical way to show a ‘friend’ you really care,” one Congressional aide told Foreign Policy in response.

Read more »

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Hydropolitics Between Ethiopia and Egypt: A Historical Timeline

From top left: Emperor Haile Selassie, President Gamal Abdel Nasser, Prime Minister Meles Zenawi, President Hosni Mubarak, Prime Minister Hailemariam Desalegn and President Mohamed Morsi. (Photos: Creative commons)

Tadias Magazine

By Tadias Staff

Published: Tuesday, June 18th, 2013

New York (TADIAS) — Hydropolitics flare up is not new to Africa’s Nile Basin region. The world’s longest river, which flows northwards and criss-crosses eleven countries, has been a particular point of tension between Egypt and Ethiopia for a long time; especially when it comes to the equitable sharing of the water resource for economic development.

In 1959, the colonial-era Waters Agreement between Egypt and Sudan was signed before all the upriver countries had achieved independence — namely Tanzania (1961), Uganda (1962), Rwanda (1962), Burundi (1962), and Kenya (1963) — excluding Ethiopia from the deal. Emperor Haile Selassie who was incensed by the snub, responded by ending the Ethiopian Orthodox Church’s 1,600 year relationship with the Egyptian Coptic Orthodox Church in Alexandria.

According to a newly launched historical data visualization web site, TimeLine Ethiopia, the colonial era agreement had allocated 55.5 billion cubic meters of water annually to Egypt while Sudan was given 18.5 billion cubic meters, which represented 99% of the average annual flow of the Nile river.

That same year Haile Selassie decided to commission a $10 million American-led study entitled “Land and Water Resources of the Blue Nile Basin: Ethiopia.” The seventeen volume report finalized in 1964 served as the blueprint and beginning of Ethiopia’s mission to build multiple dams on the Blue Nile and its tributaries.

Egypt, under the leadership of Gamal Abdel Nasser, retaliated against Haile Selassie’s initiative by clandestinely supporting armed insurrections in the northern parts of Ethiopia in order to foment civil war and unrest in the country. According to Wikipedia Nasser was also simultaneously busy overseeing the construction of a high dam in Egypt to satisfy his country’s “ability to control floods, provide water for irrigation, and generate hydroelectricity seen as pivotal to Egypt’s industrialization.”

Fast forwarding to current times, when Ethiopia’s former Prime Minister Meles Zenawi re-initiated the project to accomplish unrealized ambitions for Ethiopia, Egyptian President Hosni Mubarak, did not welcome the effort.

In 2013 Ethiopia’s diverting of waters to complete the Grand Renaissance Dam project has been met by high-level Egyptian agitation including discussions of sabotage on live television.

Below is an interactive timeline of the Nile dispute courtesy of TimeLine Ethiopia.

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Ethiopia & Egypt: Visualizing Nile Data – Access to Electricity vs Fresh Water

Nile Basin countries GDP, population, and hydroelectric power production data from The World Bank, World Development Indicators. (data.worldbank.org)

Tadias Magazine

By Tadias Staff

Updated: Saturday, June 15th, 2013

New York (TADIAS) – In 2009, over 99% of Egypt’s residents had access to electricity, while in Ethiopia, a country of 80 million, less than 18% of the population had access to power. In neighboring Sudan 35% of its roughly 30 million inhabitants received energy generated by the Nile river.

In 2011 the annual fresh water withdrawal in Egypt was recorded as 68.30 billion cubic meters. The same year Sudan also took in 37.14 billion cubic meters of fresh water. In comparison, Ethiopia’s withdrawal of fresh water for the same period was a meager 5.56 billion cubic meters.

These statistics come from the World Bank’s “World Development Indicators” and are now compiled by a newly launched website that employs data visualization and creative interactive timelines of Ethiopian history and current affairs.

“While working on my first historical item to publish, on the Solomonic Dynasty, the whole Nile issue exploded into the international news scene,” said Jomo Tariku, the site’s founder, who works as a designer and publishing officer at the World Bank’s Development Data Group in Washington, D.C. that includes the Open-Data team. “So I thought that was a perfect vehicle to do a data-based analysis, as much as possible, on facts and not emotions.”

Ethiopia and Egypt, next to Nigeria, are both among the top-three most populated countries in Africa. Jomo told Tadias that research driven stories are something he deals with on a daily basis, and he hopes that this would particularly assist journalists in providing a balanced coverage of the rather heated current exchange between the two nations on the Nile matter.

“Our main site and the most visited one at the World Bank is under our wing at data.worldbank.org,” Jomo said. “Our other popular asset that really makes the World Bank stand out compared to any organization that has vast amounts of data is our databank tool that lets you query our indicators and build your own analysis.”

Graph: Access to Electricity vs. Total Fresh Water Withdrawals (Source: data.worldbank.org)

“What inspired this project?” we asked Jomo. “Even though I have been meaning to do a data visualization site on the continent and Ethiopia, discovering a similar Ghanaian site really got me off my lazy chair,” Jomo said.

So what’s the next topic he is researching? “I will publish one on Abebe Bekila by Monday,” Jomo said. “I am sticking with Wikipedia and World Bank but I will be using any free data source I can find to generate the visualizations.”

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You can learn more and add to the information at www.timelineethiopia.com.

Related:

Hydropolitics Between Ethiopia and Egypt: A Historical Timeline (TADIAS)

Law Professor Urges Ethiopia to Take Nile Issue to International Court (TADIAS)

Tom Campbell: America Would Be Wrong to Favor Egypt in Water Rift (OC Register)

Egypt’s Nile Threats Weaken Case to Secure Water: Shinn (Bloomberg)

Join the conversation on Twitter and Facebook.

Tadias Magazine

By Tadias Staff

Updated: August 18th, 2020

New York (TADIAS) — Celebrity chef, author and businessman Marcus Samuelsson has been named brand advisor and guest editor of the upcoming holiday edition of Bon Appétit magazine, America’s leading food and entertainment publication since it was launched in 1956.

“In his advisory role, a first for Bon Appétit, Chef Samuelsson will offer his insights on food culture globally, and help expand Bon Appétit’s food and recipe content,” the magazine said noting that the double issue covering the holiday season into the New Year, will hit the newsstands on December 1st and will appear on bonappetit.com the same day. “Chef Samuelsson will also advise Condé Nast on its growing global footprint within food media as he works with the company’s market and brand leaders to spearhead new initiatives and programming.”

The Editor-in-Chief of Vogue and Artistic Director of Condé Nast — the parent company of Bon Appétit — Anna Wintour said in a statement: “It’s an honor to welcome such a bold and brilliant culinary force like Marcus to the Bon Appétit team. He is a visionary and inspiration to so many in the food world and beyond, from aspiring entrepreneurs and home cooks to today’s most renowned chefs. We can’t wait for our audience to get cooking with him.”

Marcus Samuelsson added: “Now is a time of seismic change not only within our culinary world but in our communities at large and we have a responsibility and opportunity to come together to show how food is a reflection of our cultures, our societal values, and our individuality. I learned from working in restaurants at a young age that you’re nobody without your crew. To make a meaningful impact means both empowering the incredible talents around you and enlisting those you admire to share their stories and lend their voice. l’m looking forward to joining forces with Sonia and the team to work toward this greater goal.”

Below is is rest of the announcement courtesy of Condé Nast- Bon Appétit:

Chef Samuelsson is the acclaimed chef, cookbook author, TV personality, philanthropist and food activist behind the iconic New York City restaurant, Red Rooster Harlem. He has won multiple James Beard Foundation awards for his work as a chef and as host of PBS’s No Passport Required, his public television series produced with Vox/Eater. Samuelsson was crowned champion of Top Chef Masters and Chopped All Stars, and was the guest chef for President Obama’s first state dinner. During the COVID-19 pandemic, Samuelsson converted his restaurants Red Rooster Harlem, Marcus B&P in Newark, and Red Rooster Overtown in Miami into community kitchens in partnership with World Central Kitchen, serving well over 150,000 meals to those in need.

Bon Appétit is one the fastest growing brands within the Condé Nast portfolio. The top-rated food brand on YouTube has surpassed 6M subscribers since launching the channel in 2018. With 7M print readers, 10.6M digital unique visitors, 11.8M social followers and 141M video views, Bon Appétit’s audience is deeply connected to its content published across all platforms.

Bon Appétit won four ASME Ellies in 2020, including its third General Excellence win. The brand has been named to Advertising Age’s A-List for eight consecutive years, including Magazine of the Year in 2013 and 2017, Brand of the Year in 2015, and Digital and Video recognition in 2019. Bon Appétit has been named to Adweek’s Hot List every year since 2012, including Hottest Food Magazine in 2013, 2017, 2018 and 2019. Condé Nast Entertainment was awarded Digiday’s Best Use of YouTube for Bon Appétit’s channel in 2020.

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