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.

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.

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.

Yesterday, the Sudanese government released 1,400 Ethiopians who were held prisoners in various detention centres in the country.

They were released following the presidential decree issued by President Omar al-Bashir.

PM Abiy Ahmed presented a request to the Sudanese President for the release of Ethiopians who are detained in that country during his visit to Khartoum last week

PM Abiy has made similar request to President Uhuru Kenyata of Kenya during his state visit to Nairobi last week.

The Kenyan President has pledged for the release of the Ethiopians.

President Mulatu Teshome and Chairman of the NPC Li Zhanshu met yesterday to discuss bilateral and regional issues. Li Zhanshu said his country will continue its multi-sectoral development support for Ethiopia.

During the meeting, Li said China gives priority to the bilateral ties with Ethiopia and needs Ethiopia to continue its pivotal role in Sino-Africa partnership. He expressed that China commended the peaceful election of the new Prime Minister and restoration of tranquillity and stability in Ethiopia.

He also added that China is desirous for Ethiopia to further promote its leading role in shoring-up the Forum on China-Africa Cooperation (FOCAC) in general and its strategic partnership with China in particular.

President Mulatu Teshome said on his part that China has been playing a key role in Ethiopia’s economic and infrastructure development, adding that “Ethiopia is always ready to work in cooperation with China in various economic sectors.”

Ethiopia’s clear development policy and unreserved development support from countries like China have played a significant role in the country’s achievements.

More than 624 investment projects are being run by Chinese companies with over 4 billion US dollar capital; thus created more than 100,000 jobs opportunities for local Ethiopians.

President Mulatu appreciated China’s multi-faceted contribution to infrastructure and industrial park developments in Ethiopia, which is a visible manifestation of Ethio-China partnership and expressed his confidence to further continue its support in the future.

Li is a member of the Political Bureau of the Communist Party of China (CPC) and is one of China’s top decision-making bodies.

Ethiopia and China have been enjoying long historical ties since 1970.

The first months of 2018 have been marked by considerable changes in Ethiopia, with the surprise resignation of Prime Minister Hailemariam and the release of thousands of prisoners across the country. 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 the previous issue of our magazine, we gave an account of the breakthrough agreement made between the ruling and opposition parties to amend key Ethiopian laws, such as the electoral law, the anti-terrorism law and the law governing civil society organisations.

Following the EPRDF executive committee’s 17-day long meeting which took place from 12 to 30 December 2017, based on the government’s decision to release prisoners, more than 6000 thousand prisoners have been released both from federal and regional detention centres; including leaders of political parties. Since then, the first months of the year were marked by considerable changes in Ethiopia.

Months of change

February 2018 saw an unprecedented event in the country when Prime Minister Hailemariam Dessalegn announced his resignation. For the first time in history, a sitting Prime Minister resigned voluntarily from power. In 1974, the then Prime Minister Aklilu Habtewold quit and was replaced by Endalkachew Mekonen following mounting pressure from students and the military. However, Aklilu’s resignation did not have real consequences because Emperor Haileselassie was de facto holding power in the country. This time, the resignation of Prime Minister Hailemariam came as a surprise to everyone, making some sceptical and bringing big hopes to many. To his credit, PM Hailemariam successfully charted the transition after the unexpected death of the late PM Meles Zenawi in 2012. Flagship projects such as the Addis Ababa Light Train (AALT), the Ethio-Djibouti electrified passenger and freight train line, and the construction of industrial parks in different parts of the country where under his direct watch. PM Hailemariam’s firm stance to fight corruption and to reform governance should also be recognised. Concerning Foreign relations, Ethiopia has continued to be a credible partner, both in Africa and to the rest of the world. The consecutive visits to Ethiopia of the Foreign Ministers of the United States of America and that of Russia, even though the country had declared a state of emergency, are further proof of that.

A surprise resignation

the PM announced his resignation on 16 February 2018, his decision caught many by surprise. Reactions to the news were mixed. As Ethiopia had never experienced the voluntary departure of its top leader, people were wondering about the reasons that pushed him to take such a bold and courageous decision. Despite the continuous and growing violent protests in some part of the country most people in the country were expecting him to stay in power until the end of his term in 2020. However, for those who knew Prime Minister Hailemariam’s determination to maintain the peace and stability of Ethiopia, and his dedication to contributing to the democratisation process of the country, his decision was perceived as the normal course of action. In fact, the Prime minister explained his motivation to take such a decision as a will “to become part of the solution.” Indeed, his action will impact many in the country and perhaps on the continent.

Why are some sceptical?

Some, both in and outside the country, are sceptical about whether PM Hailemariam’s resignation was entirely voluntary. Indeed, even if departure from political office in the event of failing to satisfy public demands is a common occurrence, notably in the Western world; this had never been the case in Ethiopia. Public discontent alone was not sufficient for leaders to be removed from office. Armed struggle or coups d’état were the common ways to topple leaders from power. Against this historical backdrop, the surprise resignation of a leader naturally provoked scepticism on whether PM Hailemariam had resigned voluntarily. Nonetheless, the approval of his resignation by his party, the South Ethiopian Peoples’ Democratic Movement (SEPDM) and that of the EPRDF’s executive committee shows that the process of resignation was healthy and motivated solely by the PM’s personal interests.

The hope to deepen democracy

During his resignation announcement, the Prime minister underlined that by making this decision, his objective was to play his part in the long march towards deepening democracy in the country. Such concession from the top leadership clearly shows, among other things, an essential change in the perception of power around the elite in Ethiopia. Knowing the Ethiopian peoples’ tradition and tendency to follow the footsteps of its leaders, bold decisions of such kind taken at the top will undoubtedly have an overarching and long-lasting impact on the youth in general and those holding public office in particular.

The ruling party’s quest to enhance the democratic system in Ethiopia arguably started in 1991, when the incumbent ruling party EPRDF invited all armed groups in the country to participate in drafting the new Constitution and establishing legal opposition political parties. During the last election in 2015 alone, 57 different political parties participated in the national polls. For a country which until recently had never experienced a multiparty political system, such development was a step forward to enhance democracy. Despite opposition parties gaining nearly one-third of the Federal Parliament during the third national election in 2005, the process of democratisation in Ethiopia is still in its infant stage. From this point of view, the candid discussions between the ruling and opposition political parties, the release of prisoners and PM Hailemariam’s resignation to become part of the democratisation process will not only cement a healthy change of power but has also generated an immense hope for the long-lasting peace and stability in the country.

A new beginning

2 April 2018 was yet another historical day in Ethiopia, as the outgoing Prime Minister graciously handed over the country’s constitution to the new Premier Dr Abiy Ahmed, in the national Parliament. Abiy Ahmed’s conciliatory inaugural speech emphasised the importance of working in close cooperation with opposition parties. He added that the ruling EPRDF is open to negotiating with any political party that wants to hold talks peacefully and readier than ever to help establish a vibrant political environment in Ethiopia. Since taking office, PM Abiy has been meeting with the public in different parts of the country in the Somalia, Oromia and Tigray regions as part of a general effort towards reconciliation. These initiatives promise a bright future for a strengthened democracy in the country.

Patrick Simonnet is Head of Unit ‘East Africa, Horn of Africa’ at the European External Action Service (EEAS). We interviewed him to discuss the EU position regarding the current developments in Ethiopia. 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.

Embassy: Until recently, you were the EU Ambassador to Iraq, and you were Deputy Head of Unit, Fragility and Crisis Management. You have therefore a “fresh” view of EU-Ethiopia relations. What is your assessment of their relationship over recent years?

Patrick Simonnet: As your readers probably know, we have signed an EU-Ethiopia Strategic Engagement in June 2016, and for us, that was the demonstration of the importance of our relationship. We wished to establish a strong partnership among equals, notably in peace and security, climate change, sustainable development, governance, human rights and migration. We also have as part of this strategic engagement a political dialogue with ministerial meetings every year. The next one will be hopefully this year, with the HRVP visiting [Ethiopia]. In parallel to that, we have our article 8 political dialogue which includes all our EU Member States. Basically, this is a relationship which goes beyond the EU institutions. It is a partnership which engages all our EU Member States. My assessment of the relationship over recent years is very positive because we have this Strategic Engagement that we are busy implementing, and it is also crucial for us to keep it on track despite the current situation in Ethiopia, which is a difficult one. One element that is fundamental for us is the regional and continental role of Ethiopia in a wide range of issues (ranging from peace and security, economic and social development to green energy and climate change). We know that Ethiopia has a leading role in IGAD and we very much support IGAD, including financially, and we want to continue to support the active participation of IGAD in all the matters of the region. The HRVP met with the IGAD Foreign ministers last September, and we established a steering group to foster relationship at the regional level. So, the role of Ethiopia at the regional level is crucial for us. We definitely have a common objective: maintaining Ethiopia’s unity and stability and its leadership role in the continent. Now, it is true that the current situation in Ethiopia is not conducive to a proactive role of Ethiopia in the region, so we would very much like Ethiopia to address its internal challenges so that it can really come back strongly on the regional scene.

Besides PM Hailemariam’s resignation, the government has also released or pardoned thousands of prisoners since January. What is the EU position regarding the current developments in Ethiopia?

As I said, we find that the current situation, with the State of Emergency and the resignation, is concerning, even if we fully understand that the two things are not related. It’s all the more surprising that there was some good progress and we were happy to see the liberation of political activists, that was a strong message. So, for us this should be continued, the government would need to pursue the national dialogue with the opposition and civil society. It’s probably more important now than ever with the unrest happening in some regions. We would like those positive measures, like the liberation of political activists, to be continued and expanded. We would also expect transparency on the figures of casualties and transparency on the government response to the protest. We are obviously taking a close look at issues related to accountability, and we are mindful that the Ethiopian Human Rights Commission has made some recommendations, we hope that those recommendations are being implemented. Again, on all these issues, we are a partner, so we want to assist Ethiopia in preparing the way forward for a peaceful and sustainable process. We understand this is a critical situation for Ethiopia and we want to stand by during this difficult situation.

The EU and Ethiopia enjoy a close relationship, which has been growing since 2016. What role is the EU going to play in this transition period?

I think our role is really to express our support to the Ethiopian population, at no time have we considered changing the EU assistance towards the EU population. As you know, we are also doing a lot to address the root causes of migration, and for that, we have an EU Trust Fund for Africa which comes on top of our strong bilateral cooperation with Ethiopia, and also regional programs. We have a strong relationship, and this needs to continue because it is in the interest of Ethiopians themselves. For us, as long as there is no radical development that would call some reaction from our side, we will continue cooperation, because we feel it is important, and we definitely want to continue our political discussion with Ethiopia, to see where we can help in this transition period. Again, this is a difficult time for Ethiopia, and we want to stand by as partners and friends, and if we can help, even on the political side, we will be happy to. I would also like to mention that the humanitarian situation, on top of everything, has deteriorated. There are 1.7 million internally displaced people in need for assistance in Ethiopia, and the government is fully aware of it. We are ready to continue supporting those most in need of humanitarian assistance, but it’s also something in this transition period that needs to be properly looked at.

Where are regarding the implementation of the agreements signed in 2016 by the EU and Ethiopia, such as the Strategic Agreement?

The Strategic Engagement establishes the different strands of our relationship; it’s a very diverse and comprehensive scope. It is based on dialogue; on a platform of discussions. We are a partner, so we want to assist Ethiopia in preparing the way forward for a peaceful and sustainable process. Some of this platform of discussions have already been put in place. Last year we had a discussion on human rights and democracy. We are planning to set this year platforms on peace and security and sustainable development and climate change, and we also stand ready to engage in a dialogue on migration. Now that we have agreed on procedures for returns together with the Ethiopian government, we might have a wider dialogue on migration, including legal migration. Everything is about dialogue and cooperation, and this obviously also creates opportunities for actions, for projects, but the dialogues are the best way to keep the political impetus into the strategic engagement. This is what we are planning for this year, but again, it is important that the political situation in Ethiopia gets normalised first so that we have the full attention of the Ethiopian authorities because we understand that they are really busy at the moment with other things.

Thank you!

Thank you very much, and again, Ethiopia is a very strong partner for us, and we love Ethiopia.

Ethiopian Airlines’ recent growth has been so fast that it revised the ambitious 15-year strategy set in 2010 and plans to buy more planes to step up its expansion.

Its plan had been to more than double its fleet to 120 and become Africa’s biggest airline by 2025, but it already has 100 planes flying to dozens of destinations from Asia to South America, including four U.S. cities.

The state-owned carrier has also outpaced regional competitors Kenya Airways and South African Airways to become Africa’s largest airline by revenue and profit, according to the International Air Transport Association.

“We have expanded more than we had planned,” said Chief Executive Tewolde Gebremariam.

In its 2016/17 financial year Ethiopian Airlines generated $2.7 billion in revenue, Tewolde said, up more than 11 percent from the previous year. Passenger numbers climbed by more than 18 percent to 9 million while net profit was $233 million, up from a little more than $220 million.

“We had to revise the objective to make it 150 airplanes or more by 2025.”

It now plans to place orders this year for 13 additional Boeing 787 jets and six more Airbus A350s, he told Reuters.

The airline has come a long way from when it was established in 1945 as a joint venture with now-defunct U.S. carrier Trans World Airlines (TWA).

In 2013 Ethiopian Airlines acquired a minority stake in Malawi Airlines to serve as a base for its southern Africa operations.

That kicked off a series of deals including January’s agreement with Zambia’s government to relaunch that country’s national carrier, shut down more than two decades ago.

The strategy is aimed at gaining a “competitive advantage” against rivals such as those in the Gulf, Tewolde said.

With Africa’s aviation industry still hampered by government protectionism and high taxes, Tewolde said that setting up or taking stakes in small carriers is a way around the restrictions.

Ethiopian Airlines aims to create a new airline in Mozambique that it will fully own, he said, adding that it is also in talks with Chad, Djibouti, Equatorial Guinea and Guinea to set up carriers through joint ventures.

“Going forward, it will be difficult for us to compete with only one hub in Addis Ababa.”

But it isn’t all clear skies for the fast-growing carrier.

“Running a business needs cash flow,” he said. “Here in Africa, we have a huge problem with this.”

The economic downturn in Africa caused by the collapse of oil prices in 2014 has indirectly hit the continent’s airlines, and Ethiopian is unable to repatriate more than $145 million in profits from Angola, Sudan and Zimbabwe because of foreign exchange shortages, Tewolde said.

Reuters