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Ethiopia, Egypt, Sudan Agree to Establish Independent Study Group for GERD Filling

Water and Foreign Ministers of Ethiopia, Egypt and Sudan meet to discuss the Grand Ethiopian Renaissance Dam (GERD) in Addis Ababa on Tuesday 15 May.

Foreign Minister Workeneh Gebeyhu said that Ethiopia would work full-heartedly to the successfulness of the meeting. He also expressed hope that consensus would be reached on many issues that are tabled for discussion.

The ministers discussed issues that the three countries have failed to reach agreement in their last meeting held during the first week of this month.

The tripartite meeting was held in Addis Ababa on 5 May 2018, on various issues including the filling of the reservoir and the two studies to be conducted on the Grand Ethiopian Renaissance Dam.

In the end, the tripartite meeting of Ethiopia, Egypt and Sudan agreed to establish an independent, national and scientific group to study the filling of the GERD.

The agreement reached during the meeting is a step forward for Ethiopia that has been insisting on reaching agreement on the issue.

The three countries have been discussing on filling of the GERD reservoir and operating it for years.

Ethiopia has been discussing with the downstream countries to decide upon the time that should take to fill the dam without harming those countries.

The day-long meeting also agreed on ways of presenting queries and observation to the consultancy.

The three countries have also agreed to establish a tripartite infrastructure fund that would allow engaging on joint infrastructure development endeavours.

In 2011, Ethiopia began constructing GERD over the Blue Nile, which it sees the dam as a defining national project and a means of overcoming poverty.

Ethiopia will cherish the victory of Adwa for generations to come

The Battle of Adwa fought on 1 March 1896, holds a special place in Ethiopian history. By repelling the Italian invaders, Ethiopia, led by Emperor Menelik II, defeated one of Europe’s major powers in an age of relentless European expansion into Africa. This article was originally published in the 10th issue (April 2018) of The Ethiopian Messenger, the quarterly magazine of the Embassy of Ethiopia in Brussels.

The people of Ethiopia have fought several battles and wars to preserve the dignity and the territorial integrity of their nation throughout its long history. In the 1870s and 1880s, Ethiopia successfully defeated Khedive Ismail Pasha of Egypt, who sought to bring the Nile River basin under his rule, the invading Mahdist army of Sudan and the Italians trying to turn the country into an Italian protectorate under the leadership of Emperor Yohannes IV (1837-1889).

The importance of Adwa

But the Battle of Adwa fought on 1 March 1896 holds a special place in Ethiopian History. By repelling the Italians, Ethiopia, led by Emperor Menelik II, defeated one of Europe’s major powers in an age of relentless European expansion into Africa. This victory changed the country’s destiny and transformed the consciousness of Ethiopians and people of African descent all over the world as a symbol of resistance to colonialism. Thanks to their heroic resistance, Ethiopians managed to remain the only independent African country of that time, which is why they cherish the victory of Adwa for the generations to come. As we celebrate this important part of Ethiopia’s modern history, we should also seize this opportunity to investigate many aspects of that famous chapter, and numerous revelations probably still await us as many aspects of the battle are still not well researched.

 

Historical Context

It is important to remind the current generation of the historical background of Adwa, the preparation for the battle, its aftermath and the various consequences of the battle, at the local, regional and international levels. In the late 19th century, the opening of Suez Canal in 1896 coupled with the Scramble for Africa by European powers increased the strategic importance of Ethiopia as several European Powers (notably France, Italy and Great Britain) sought influence in the area. Ethiopia was a country with a long history of civil war, but at the same time, it also had its share of resistance against foreign aggression. Egyptians, Sudanese, Ottoman Turks, and Portuguese had all tried and failed to dominate Ethiopia. Emperor Tewodros and Yohannes IV both died to protect the safety and security of their land and peoples.

Therefore, upon coming into power, Emperor Menelik (1844-1913) had the considerable pressure of maintaining the sovereignty and dignity of the people and the territorial integrity of the country. He had to manage internal problems while dealing with external threats at the same time. Unlike his predecessors, Emperor was ready to adopt modern inventions and lead his people by example. On the diplomatic front, he tried to foster good relations with many European powers and left his door open for negotiations and pacts. One of these pacts, made with Italy, eventually became the ‘seed of contention’ that caused of Battle of Adwa.

Treaty of Wuchale

The interpretation of the famous Treaty of Wuchale was the spark that ignited the second war between Ethiopia and Italy. In 1889, Menelik had concluded a treaty with Italy at Wuchale in Wollo province. However, there were two versions of the treaty, one in talian and another in Amharic. Unknown to Menelik the Italian version gave Italy more power than the two had agreed to. Article 17 of the Italian version stated Ethiopia’s relations with foreign countries would be determined by Italy, implying that Ethiopia was an Italian protectorate. But this was not an accurate reflection of the Amharic version which had been presented to the Emperor. Emperor Menelik II rejected the treaty as soon as he learned about the alteration. In the long history of Ethiopia, Ethiopians have never bargained nor compromised on their sovereignty, their independence and their freedom. Popular saying and proverbs of the land such as ‘No compromise on one’s wife, no compromise on one’s country!’ testify to this particular trait. However, it was not the intention of the Emperor Menelik to go to war against the Italians. Well aware of the enormous challenge the war would present, he first tried to use his diplomatic channels and skills to avoid the disaster.

The battle

The Italians first attempted to bribe Menelik with two million rounds of ammunition, but he refused. After a failed attempt to create a civil war in Ethiopia, the Italians declared war and invaded the country. As latecomers to ‘the scramble for Africa’, Italy wanted to imitate what other European powers had done. The interpretation of the Treaty of Wuchale was a good excuse for them to justify their expansion in Africa. Menelik had no choice but, to tell the truth to his people and alert them. He declared the preparation for the war. However, Italy had not anticipated the fierce resistance they would have to face to do so. Although aware they were outnumbered, Italians believed the Ethiopians to be undisciplined and unskilled at the art of war, negating the advantage in numbers. They were proven severely wrong, and by the afternoon of 1 March 1896, Italian forces were in a desperate, panicked retreat. For a country like Ethiopia, waging war against a highly superior, better trained and mechanised army at a place very distant from his capital city, required logistics efforts unprecedented in the history of the country. In consequence, the way the emperor and his allied handled the entire preparation and the battle can only be described as a masterstroke.

Historical legacy

The victory of Adwa quickly became the pride and inspiration of the subjugated people of the world and a beacon of hope for all those who resisted any form of domination of a people over others. Indeed, Adwa changed perspectives and History was never to be the same as in the pre-Adwa days for Ethiopians and of the people of African origin. What was considered unthinkable in pre-Adwa days was proved wrong. That is why Adwa is considered ‘the pride of Africa’. To commemorate this historical battle and reminds that it belongs to all people of African descent, the construction of Adwa Pan-African University was launched in January 2018. Upon completion, the university staff will carry out researches related to the battle to promote a better understand its story by all Africans.

EU’s contribution to East Africa’s regional integration efforts

Regional integration is complex in Africa, where a single country often belongs to several overlapping regional organisations. The EU is supporting the integration efforts of the Eastern Africa region under the Cotonou Partnership Agreement. This article was originally published in the 10th issue (April 2018) of The Ethiopian Messenger, the quarterly magazine of the Embassy of Ethiopia in Brussels.

The EU contribution to the integration efforts of the Eastern Africa region is taking place within the context of the Cotonou Partnership Agreement uniting 79 ACP member states with the EU 28 countries under a legally binding agreement. Among the ACP countries, 48 are from SubSahara Africa, 16 from the Caribbean and 15 from the Pacific Region. The 48 African nations are geographically divided into four regions (West, Central, Eastern, Southern), making the ACP a six-regional inter-governmental grouping with similar development aspiration and cultural background. The current development cooperation arrangement between EU and ACP countries incorporates at its centre a financial protocol known as the European Development Fund (EDF), which plays a crucial part of the agreement and provide financial support to ACP counties in various forms. The EDF is interlinked with other parts of the agreement that include trading arrangements such as the Economic Partnership Agreement (EPAs) and political dialogue (on human rights, democratic principles, …) between the EU and ACP.

Regional Frameworks

The EDF financial protocol devolves into three financial envelopes: the first one is National Indicative Programme (NIP), which is agreed and jointly administered between an ACP beneficial country and the EU, the Regional Indicative Programme (RIP) between an ACP region and the EU, and the Intra-ACP Programme, which aims to foster the linkage and integration between the six regions of the ACP group by focusing on commonalities among all the ACP countries. It also intends to complement NIPs and RIPs at the ACP grouping level. The case of RIP is somewhat complex in Africa, where a single country often belongs to several overlapping regional organisations. For example, Ethiopia is a member of the Eastern Africa group, one of the six regions of the ACP, when it comes decision making and other consultation within the ACP. However, when it comes to the Regional Indicative Programme (RIP), the East Africa Region is merged with other regions to form the bigger Eastern Africa (EA), Southern Africa (SA) and Indian Ocean (IO) region. The EA-SA-IO region is made up of 25 African countries with diverse political and socio-economic backgrounds and that are members of one or more Regional Organizations. Such kind of complex regional arrangement makes it complicated to implement any program in the 11th EDF. In consequence, the implementation process requires greater coordination, capacity and flexibility.

The coordinating aspect of the implementation is collectively undertaken by the Duly Mandated Regional Organizations (DMROs) which are COMESA (Common Market for Eastern and Southern Africa), EAC (East African Community), IGAD (Intergovernmental Authority on Development), IOC (Indian Ocean Commission) and SADC (Southern African Development Community). Due to this peculiar character of the region, a single Regional Indicative Programme is devised for the collective overview and programming of the five Duly Mandated Regional Organization, as stated in the Cotonou Agreement (Annex 4, Article 7) regarding regions with overlapping memberships across the regional organisations.

EU objectives in EA: fighting insecurity and poverty

The RIP exercise is primarily driven by the EU and offers a glimpse of EU’s policy interest towards the region. The EU has obviously an interest in a stable, peaceful and prosperous EA-SA-IO region. These interests are defined by the sub-region geostrategic importance particularly that of the Horn of Africa, where the EU has historically tried to protect vulnerable populations, including refugees and internally displaced persons and support the sub-region for self-sustaining economic growth. The implementation of these priorities underpins EU’s regional interests (for example these are enshrined in the EU Strategic Framework for the Horn of Africa). This Strategic Framework takes a regional approach in supporting EA-SA-IO countries by addressing the link between insecurity, poverty and governance.

A key objective is to promote sustainable development by enhancing intra-regional trade. This kind of integration will further contribute to the realisation of development goals, poverty alleviation, as well as improved conditions for investment, private sector development and decent job creation. However, to make these become a reality, EA-SA-IO countries need to take their national priorities into account in addition to the EU interest stated above (such as Agenda for Change policy document) as well as their own regional needs while setting out priorities in the RIP programming process.

Defining RIP priorities

The process of identifying priority areas under RIP and the subsequent financial allocation was a gradual exercise. The RIP programming exercise that started in 2012 attempted to adopt a participatory approach by bringing together the five DMROs and the EU to coordinate the programming and formulation processes. In practice, the EU drove the whole process as it was providing the funding. As the process required and continues to require higher internal coordination among the DMROs, within their member states and with other stakeholders, it allowed the EA-SA-IO RIP to become an instrument that mainly supports EPA negotiation and implementation. The total Regional Indicative Programme for EA-SA-IO region is 1.332 billion euros divided into three envelopes (allocations for regional organisations; infrastructure; cross-regional programmes), with an overall focus on peace and security, regional economic integration, and natural resource management.

IGAD

The allocation for IGAD is 80 million euros which will cover the conflict, early warning and response mechanism, mediation and preventive diplomacy, and countering transnational security threats; reducing barriers to free movement of persons (regional economic integration); and resilience of pastoralist populations and promoting sustainable ecosystem rehabilitation (natural resource management). And an additional amount of 5 euros million for building the capacity of the IGAD Secretariat. The biggest chunk of the financial allocation is Infrastructure projects across the entire region which will receive 600 million euros. This is expected to be used primarily for blending with funds from investment banks such as EIB. A further 205 million euros is available for seven cross-regional programmes covering the Great Lakes, migration, maritime security, the interim Economic Partnership Agreement, transboundary water management, sustainable fisheries, and wildlife conservation. In 2017, 10 million euro was also approved to the Nile Basin Initiative project from the finance allocated under Natural resource management of the current RIP.

Challenges

There are also regional implementation challenges: The first is almost all countries of the EA-SA-IO region are members of at least two regional organisations, a situation which poses problems to both regional integration and EU support to the region. An attempt to address this challenge is the Tripartite Free Trade Area Agreement between COMESA-SADC-EAC States, which committed them to the establishment of a single Free Trade Area covering 26 countries. The Tripartite process was launched in 2008, and the modalities for creating the FTA are still being negotiated. The second issue is that Eastern Africa, and particularly the Horn of Africa sub-region, is characterised by a long history of underdevelopment and conflict. This requires strong political commitment from the region and sustained a financial support by partner countries and organisations. In this light, EU needs to continue its contribution to a peaceful and developed region by supporting consensus and political dialogue as is the case in Somalia, Sudan and South Sudan via its financial support to AMISOM and UNMISS, UNISFA, peacekeeping mission. The principle of complementarity between a RIP and National Indicative Program (NIP) is another critical point that should be looked at in view of efficient utilisation of EU’s financial support.

For example, in the case of Ethiopia, the financial and technical support of EU (under EDF) to Ethiopia’s economic development agenda is complemented to some extent by earlier RIPs. This becomes visible when we look at EU assistance to Ethiopia which focuses on support for infrastructure development, food security, good governance, and capacity building. Since the early days of its cooperation with Ethiopia, the EU has provided substantial support for the infrastructure sector, and since 2006, it has provided budget support to Ethiopia’s road sector development programme (RSDP). This sector has synergies with other sectors contributing to connecting Ethiopia with its neighbours and foster regional infrastructure integration and trade linkages. For example, rural development and food security are supported by the development of rural roads and private sector development is supported by capacity building of the domestic construction industry. As the way forward, one new feature envisaged and dully pursued under the 11th EDF – RIP is the principle to allow member states have direct access to finance rather than having all funding channelled through the regional organisations. The second is the process of submitting projects for funding under the infrastructure envelope must be agreed in advance between member countries, the various RECs and EU regarding project identification, having a clear timetable for submission etc. Governments of the region need to discuss proposals with EIB. Other projects to be funded through the Regional Programme could be subject to a call for proposals, and member countries could apply. On the other hand, activities financed through RIP should be implemented by individual Governments if they fall within the regional framework. But all this must be negotiated and agreed between the EU, the five RECs and all the member countries to efficiently utilise the allocated fund and contribute to greater regional integration.

Ethiopia begins talks with the Oromo Democratic Front

The government of Ethiopia has begun talks with the Oromo Democratic Front (ODF), a party based in a foreign country. The government of Ethiopia is making every effort to ensure peace and security.

Prime Minister Abiy Ahmed is tasked with overseeing the reforms initiated since January 2018. Shortly after taking office, he met with opposition leaders from across the country.

As per its decision to hold talks with political parties that want to operate peacefully and in line with the Constitution, the government of Ethiopia invited political parties for peace talks.

The government of Ethiopia appreciates ODF’s decision to accept the invitation and operate peacefully.

The discussion held so far with the Front was successful. the government of Ethiopia is also ready to hold talks with political parties that want to work peacefully.

Leaders of the Front will arrive in Ethiopians soon and additional talks will be held in the capital Addis Ababa.

27th anniversary celebration of Ginbot 20

Message for the members of the Ethiopian diaspora:

You are cordially invited to the celebration of the 27th anniversary of Ginbot 20.
The celebration will take place on Saturday 2 June 2018 from 14:00 to 20:00 at the Embassy of Ethiopia in Brussels, located on Avenue de Tervuren 64, 1040 Brussels.
Please confirm your participation by phone (+32 2 771 32 94) or by sending an email to info@ethiopianembassy.be

Voith Hydro opens new East Africa hub in Addis Ababa

Headquartered in Germany, Voith Hydro, one of the world’s leading suppliers of hydroelectric equipment, has opened its new East Africa Hub in Addis Ababa, Ethiopia.

The new facility will coordinate hydropower projects in nine countries in East Africa.

Dr Firehiwot Woldehana, State Minister of Water, Irrigation and Electricity, said that the new hub will assist the efforts being made to exploit Ethiopia’s potential in renewable energy.

It will also help to transfer technology and knowledge as well as create employment opportunities for Ethiopian professionals.

Uwe Wehnhardt, CEO of Voith Hydro said: “We are here to build long-term relationships with partners.”

Voith Hydro distributes hydroelectric equipment, technology, and services.

Its supplying products cover new and existing large and small hydropower plants that include large hydro plants, small hydro plants, pumped storage plants, and ocean energies.

The company also provides services for various types of generators, turbines, automation, and auxiliary equipment; assessment, diagnostics and data evaluation, spare parts service, maintenance, repairs, general overhaul, emergency support, and on-site-machining services; and modernization and rehabilitation services.

It offers products to the field of power generation and the area of storing electric power.

Infrastructural Works Registering Impressive Growth

 

The activities that have been underway to develop infrastructural networks across the country are paying off.

The public, including farmers, are benefiting from access to all-weather roads and cell phone services.

Over the last couple of years, in particular, the government has focused on building roads and expanding mobile phone services; thus significantly contributing to the economic development of the country.

The maintenance, rehabilitation, upgrading, and construction of over 136,000kms new asphalt roads have been carried out with more than 300 billion birr during the last few years.

The entire road network in the country, which was only 26,500kms in 1998, has jumped over 120,000kms because of the development activities that were undertaken by the government.

It took about 7 hours to reach an all-weather road in 1998, but today it only takes a little over one hour.

According to the Ethio-telecom Corporate Communications Officer, Abdurahim Ahmed, the telecom industry in Ethiopia has come through more than 124 years of operation; but the modernization and technical innovations conducted over the last ten years clearly stand out.

The number of cell phone owners in the country was only 6.2 million in 2010, it is now 64 million, with 4G technology for Addis Ababa and 3G for other regions.

College of Finance Management and Development Deputy Director at Civil Service University Dr Kassa Teshager said the government is expending a huge amount of money on road construction; but also said more is desired in terms of ascertaining road quality control and accessibility to unreached areas.

Ethiopia: Land of Lucrative Dairy Investment and Trade Opportunities

The volume of milk production in Ethiopia has tripled over the last eighteen years. However, the productivity of the dairy sector remains low due to local challenges. Since the industry is at a turning point in its history, with a shift from public sector involvement towards private sector participation, new investors have abundant opportunities to develop the industry and tap into the rapidly-growing local market. This article was originally published in the 10th issue (April 2018) of The Ethiopian Messenger, the quarterly magazine of the Embassy of Ethiopia in Brussels.

Over the last decade, the dairy sector in Ethiopia has shown considerable progress. Ethiopia holds immense potential for dairy development due to its large livestock population, a favourable agro-ecological situation for improved, high-yielding animal breeds and fodder production for livestock. There are 11.4 million milking cows in Ethiopia, and the volume of milk produced is about 3 billion litres-this figure used to be less than 1 billion 18 years ago. The dairy sector accounts for 40% of the agricultural GDP and 12-1 16% of the national GDP, which is twice as high in neighbouring countries in Eastern Africa. Given the considerable potential for smallholder income and employment generation from high-value dairy products, a vibrant dairy sector can contribute significantly to achieving the Sustainable Development Goals of the country.

Policy/Livestock Master Plan and Production Boost

Over the past eight years, the Government of Ethiopia has prioritised the transformation of the agricultural sector as part of the national Growth and Transformation Plan (GTP). The introduction of GTP II 2015–2020 was followed by a roadmap that comprises investment interventions bundled together in the Livestock Master Plan (LMP), which included a “Cow Dairy Development Roadmap” aiming at significantly increasing milk production. This plan has two tracks to reach the goal of substantially higher milk production: 1. For the traditional smallholder dairy farming system, the proposed interventions are crossbreeding with exotic dairy breeds through AI and synchronisation, and better feed and health services. 2. For the commercial dairy farming system, the aim is to bring more crossbred cattle into the farms, expanding the number of farms, increasing the availability of forage and concentrated feeds and improving the marketing and processing of milk. The implementation of this plan should result in a 93% increase in milk production. This increase will not only create opportunities for supplying more dairy products to Ethiopian consumers but will also pave the way for export of dairy products. A milk surplus of 2.5 billion litres is expected to be available for export in 2020. Ultimately, the contribution of the dairy sector to GDP is expected to rise from 28 billion ETB in 2014/15 to 52.9 billion ETB in 2020.

National dairy production, processing, value chain structure and government inputs

In Ethiopia, 11.4 million milking cows are currently producing 3,044,977 tons of milk every year. Ethiopian dairy cattle population is distributed over all areas of the country, but the four regions with the highest number of milking cows are Oromia (44%), Amhara (17%), SNNP (22%) and Tigray (9%). Moreover, milk production is mostly located in the highlands of Ethiopia, as only about 10% of the total milking cow population is found in lowland areas. Also, nine major milk-production which have the best potential for value chain and dairy sector development, called milk sheds, were established in the country’s larger cities (Adama-Asella ADA/Bishoftu, the Great Addis, Ambo-Woliso, Humera, Jimma, Bahir Dar-Gondar, HawassaShashemene, Makelle and Dire-Dawa). The dairy value chain structure is organised in such a way that milk processors collect raw milk from dairy farms, private milk collectors, cooperatives and unions. Dairy cooperatives play a significant role in milk collection. The size of a single cooperative range between 20 and 400 farmers. Unions serve as umbrella organisations for 5-30 cooperatives. Dairy processing is booming in Ethiopia. Currently, there are more than 50 active dairy processors in the country, and most of the companies operate in the vicinity of the capital/Addis Ababa. The average per capita consumption of dairy products of the country is estimated at around 20 litres.

The primary input for the dairy sector is breeding and genetics. In consequence, the Government established a National Artificial Insemination Centers (NAIC) with the objective of improving milk production in local cattle breeds by producing and distributing quality semen from genetically enhanced bulls. The government primarily delivers veterinary services/inputs in the country. For instance, in 2012 there were a total of 9,711 animal health professionals, 256 at the federal level and the remaining 9,455 distributed across regional states. The other input for dairy sector development is old chain logistics and equipment. The number of milking equipment, tractors and machines is limited in Ethiopia, but the increase in herd size in the major milk-sheds is paving the road for more milking machines on farms and investments in harvesting equipment. In Ethiopia, larger farms in need of loan inputs for investment may have access to credit based on collateral. Development Bank of Ethiopia (DBE) may provide loans up to 70% of the total investments depending upon the bankability of the project. The Cooperative Bank of Oromia (CBO) also works with dairy farm cooperatives. CBO also collaborates with various financial institutions, like the Rabobank in The Netherlands, to improve skills and knowledge in agro-finance.

Lucrative domestic market

Ethiopia is one of Africa’s rising economies, with a double-digit economic growth rate in GDP in the past decade. The same is true for the potential growth in the consumption of dairy products. The rapidly increasing population and growing urbanisation rate are resulting in a shift in demand for dairy products. Dairy development can also lead to income generating activities in the rural areas, increasing farmers’ incomes and employment opportunities. This is one of the reasons for the launch of dairy processors in the last decade. Ethiopia holds immense potential for dairy development. Due to the favourable dairy policy of the government, the dairy sector in Ethiopia is expected to continue growing over the next one to two decades. Besides, the convenient agroecological situation of the country – fertile soil and high precipitation create right conditions for fodder production, with excellent climate for highly productive dairy cows in the highlands – offer other advantages for the growth of the sector. Moreover, since the formal dairy value chain is still in its early stages of development, new investors have abundant opportunities to develop and modernise the industry further.

Challenges and opportunities of the sector

Despite these assets, the productivity of the dairy sector is disproportionally low due to some dynamic economic, technical, and institutional challenges. The challenges of the Ethiopian dairy farming are a shortage of feed/poor ration formulation, scarcity of fodder, a low milk production per cow, a lack of chilling facilities on a farm and the fact that the majority of dairy farmers are smallholders (1-3 cows). Other limitations include inadequate access to finance, weak linkages between chain actors, a limited private sector, limited AI services and animal diseases that hinder. However, the problems listed above can also help foreign direct investors and traders to quickly understand which gaps they can fill, as the Ethiopian dairy sector is at a turning point in its history, with a shift from public sector involvement towards private sector participation. There are ample opportunities for foreign companies in dairy farming, dairy processing, business development and financial services. In Ethiopia, entrepreneurs should establish and introduce new knowledge and eco-friendly technology in commercial feed and fodder production, supplying young stock, AI services and upgrading genetics, health, cattle-housing design and farm equipment for milking and harvesting. This will benefit both the investor and the country in transforming the infant dairy sector to a modern dairy value chain industry with adequate economies of scale and backward and forward linkages.

Investment requirements, incentives and guarantees

The Ethiopian Investment Proclamation sets a minimum capital requirement on foreign investors as USD 200,000 for a single investment project by a foreign investor, USD 150,000 if joint investment with a domestic investor and no capital requirement for reinvestment of profit or dividend. The Ethiopian investment code offers the following income tax exemption incentives for investment in livestock farming: • Up to 9 years income tax exemption. Additional two years exemption if 60% of the product is directly exported or supplied to the exporter.

• An additional 30% deduction for three consecutive years if investment in underdeveloped regions as defined under Investment Regulation No. 270/2012.

Besides, for investment in industrial/ integrated-agroindustrial parks, the following incentives will be provided:

• 10-15 years income tax exemption for development of industrial parks depending on park location (10 years if in Addis Ababa or Special Zones of Oromia surrounding Addis Ababa, and 15 years in other areas. • 60-80 years land lease right at a promotional rate; with sub-lease right.

• Reliable electricity at globally competitive rate-government avails dedicated power substation for industrial parks. Other incentives to foreign investors include duty exemptions on the import of capital goods, construction materials, spare parts with a value up to 15% of the total value of capital goods (100% of total value for industrial park enterprises that are fully exporters), and motor vehicles required for investment operation, as well as on the raw materials needed for the production of export commodities, and personal effects for residents in industrial parks. Moreover, investors buying the above items from the local market can seek a refund of the duty paid. There is also an export duty exemption-on all products except semi-processed hides and skins.

Investors also have the rights to remittance of capital in convertible foreign currency and carry forward any loss incurred within the period of income tax exemption for half of the income tax exemption period after expiry; the maximum is five years and customer facilitation through bonded warehouse and voucher schemes. The Ethiopian Investment Commission also provides investment facilitations via one-stop shop and after-care service. The Ethiopian constitution and investment code offer guarantees to foreign direct investments in the country and Ethiopia is a signatory to Multilateral Investment Agency (MIGA), World Bank Affiliate Group and concluded Investment Protection Agreement with the Benelux countries. Ethiopia has also signed an Avoidance of Double Taxation Agreement with The Netherlands. Given the above opportunities and incentives, the Ethiopian Government highly encourages the Ethiopian Diaspora and foreign investors to invest in the dairy sector, independently or in a joint-venture and tap into the lucrative domestic dairy market and potential for export of dairy products.

State of negotiations about the GERD, cornerstone of Ethiopia’s developmental project

Ethiopia, Sudan and Egypt are engaged in extensive negotiations about the Grand Ethiopian Renaissance Dam (GERD), the cornerstone of Ethiopia’s developmental project. This article was originally published in the 10th issue (April 2018) of The Ethiopian Messenger, the quarterly magazine of the Embassy of Ethiopia in Brussels.

In 2013, Ethiopia began construction of the Grand Ethiopian Renaissance Dam (GERD), located in the headwaters of the Blue Nile River. The utilisation of the Nile waters is the centrepiece of Ethiopia’s developmental project. Upon completion, the dam will be Africa’s largest hydroelectric power plant and will boost the economic growth of Ethiopia. The Nile is Ethiopia’s primary water resource: it covers 70% of its annual surface water and one-third of the country’s territory. However, with nearly 65 million people (more than 60 percent of the population) living without access to electricity, Ethiopia is also one of the countries with the highest energy poverty in the world, while the energy demand is increasing by 32 percent each year. Therefore, the utilisation of the waters of the Nile River is indispensable to eradicate poverty and the survival of Ethiopia. Currently, two-thirds of Ethiopia’s hydroelectric power potential is in the Nile Basin. Upon completion, the GERD will triplicate Ethiopia’s consumed energy and will be the country’s driving force for exporting electricity to its neighbouring countries.

Extensive regional negotiations

Ethiopia’s decision to construct a dam along the Nile has attracted criticism amongst the nations along the Nile, most significantly, Egypt. To appease this doubts, Ethiopia and Egypt have engaged in extensive negotiations about the GERD since its construction began. However, Cairo has, time and again, been relying on inertia to prevent any change in its dominating position by referring to a colonial agreement granting Egypt the enjoyment of most of the waters of the Nile (about two thirds, while 20 percent were guaranteed in Sudan). Ethiopia, despite being the source of 86 percent of the river’s water, has never been included in these water-sharing agreements and has for years been voicing out its right to develop the resource in every possible forum. Egypt has regarded the GERD as a risk for its survival since the very first day. To appease these fears, Addis stepped up efforts to convince Cairo that the dam would not harm Egypt by providing clarifications and confirmations on issues of concerns. Ethiopia even established an International Panel of Experts (IPoE), composed of two experts from each of the countries (Egypt, Ethiopia and Sudan) concerned and international experts to review the design documents of the GERD and analyse of the benefits, costs and impacts of the GERD on each country. In May 2013, the IPoE’s final report, which concluded that the design and construction of the GERD were up to international standard and recommended two additional studies, was accepted by Sudan and Ethiopia but incomprehensibly rejected by Egypt. A Tripartite National Committee (TNC) composed of experts from the three countries was established in 2014 to guide and follow up on the conduct of the two assessment studies s to be conducted jointly by Ethiopia, Egypt and Sudan to enhance and build trust. Since 2013, trilateral and bilateral meetings have succeeded one another. However, Egypt has obstinately continued to deny Ethiopia`s legitimate right to fill and operate the GERD – a flagrant violation of the Agreement on the Declaration of Principles (DoP) on the GERD signed by the leaders of the three countries in March 2015.

Non-harmful development

Ethiopians have no intention to inflict any harm on Egyptians. The country is determined to build GERD because fighting poverty is a matter of survival to its people. Ethiopia’s endeavour to alleviate poverty and ensure sustainable economic growth is conducted with great respect to the principles of posing no-significant harm and equitable use of transboundary resources. Starting in the 1950s, Ethiopia conceived the idea of constructing hydroelectric dams in the Blue Nile Gorge and has undertaken several studies to meet the vital needs of its growing population. Studies conducted for half a century have found out that the dam has many blessings to offer to both Sudan and Egypt – be it in reducing sedimentation at Roseries Dam and protecting frequent flooding in Sudan, increasing the water levels at Aswan High Dam, not to mention its impacts in ensuring regulated flow of water in the Nile course. The mutually beneficial construction of an Ethiopian dam on Tekeze River is further proof of this. In short, the construction of the GERD has been planned carefully for decades, and Ethiopia has been carrying out its construction based on reliable experimental studies with consideration of downstream countries.

Stalemate

Ethiopia will soon start filling the dam. Again, the GERD filling plan considers the concerns of the three countries and will be done in a phased and responsible manner without causing significant harm to the equitable and reasonable use of the Nile waters by the two downstream states. The filling model of the Dam was specifically designed not to cause significant harm to lower riparian countries and considered hydro and geographical factors. Ethiopia has conducted these studies with the aim of building trust and confidence. The GERD is expected to have a positive impact regarding climate change, as the electric power the dam will generate will help ease the use of traditional firewood and will bring positive impact on the area’s climate Recent reports indicated the termination of the tripartite talks between Ethiopia, Sudan and Egypt due to inquiries from Egypt to incorporate the 1959 treaty, made between Egypt and Sudan, in their discussion agendas. Since then, various reports aiming to aggravate the discord were released by different media.

The way forward

However, leaders of Ethiopia, Egypt, and Sudan agreed to work together on the Dam and issues of common interest and emphasised the need to work in unity after meeting on the sidelines of the African Union summit in Addis Ababa in January 2018. Strengthening cooperation on the issue of the Grand Ethiopian Renaissance Dam (GERD) and boosting development cooperation were the major agendas. A consensus was reached among the leaders that any matter that harms any country should concern the other and moving way separately could not be the solution. The three leaders have instructed their Water and Foreign ministers to discuss on major issues related to GERD and report to the leaders within a month. They also agreed to establish a joint infrastructure fund that would allow infrastructure integration among the three countries. Unfortunately, a new round of talks held early April in Khartoum to ease Egypt’s concerns failed, as Cairo persists on claiming its “historical rights” on the river, guaranteed by colonial treaties dating from 1929 and 1959. The GERD is a symbol of cooperation that aims at enhancing the capacity of all the riparian countries including Egypt. Ethiopia firmly believes that the GERD will cause no significant harms to Egypt and always aspires to pursue its development activities in a “win-win” approach. Ethiopia is confident that the Nile`s waters are sufficient for all. Therefore, negotiation and balancing the interests of all parties concerned is only way out.

Technical talks over the GERD failed to make a breakthrough

The technical talks between Egypt, Sudan and Ethiopia ended on May 5 without reaching an agreement on the technical report prepared by French firms on the potential impact of the dam. On Monday, Shoukry reportedly blamed Sudan and Ethiopia for the failure of the recent round of the tripartite dam talks held in Ethiopia, accusing Sudan of narrowing the viewpoints of the meeting.

In response, the Spokesperson of the Ministry of Foreign Affairs of Ethiopia, Meles Alem announced on 10 May that Foreign Affairs Minister of Egypt Sameh Shoukri has continued his trend of unconstructive comments on the Great Ethiopian Renaissance Dam (GERD) after the failure of the latest round of Dam talks in Sudan.

Shoukri was frequently quoted in Egyptian media in past commenting on the construction of the GERD and its effect on downstream countries.

The dam talk which was held in Khartum Sudan on April 6, 2018, failed to succeed after a long meeting among the three water ministers: Ethiopia, Sudan and Egypt.

The three water ministers have agreed to meet in Addis Ababa on May 15.