Ethiopia and Kenya to sign simplified trade regime agreement to manage illegal cross border trade.
Small scale trade along the Kenya- Ethiopia border is poised to thrive following bilateral negotiations between the two parties to agree on a Common List of products to be traded under the Simplified Trade Regime (STR).
The negotiations took place on 1st March 2022 at the Moyale border post and addressed the implementation of the STR between two countries. The STR which was launched in 2010 was done so in order to enable small-scale traders’ to become beneficiaries from COMESA’s trade liberalization programme by simplifying and formalizing the trade.
According to experts, effective implementation of the STR spurs growth, enhances production and productivity of the agricultural sectors through value addition and processing thereby creating jobs and increasing household incomes down the road.
Ethiopia has lost up to 78 billion dollars in five years through trade mis-invoicing practices, one of the tools in executing illicit financial flows.
Export under-invoice and import over-invoicing are the common activities in the illicit financial flows.
Corrupted officials at borders contributed to the expansion of illegal financial flows and trade, Mussie Mindaye, Trade Relations and Negotiations Directorate General at the Ministry of Trade and Regional Integration, pin-pointed.
Mussie explained that the absence of a comprehensive trade deal with neighbors and poor border management as contributing factors to the booming illegal trade in border areas.
Ethiopia’s vast borderland makes construction of infrastructures across the border expensive and cumbersome task, according to Mussie.
Illegal business activities conducted in different ways in Ethiopia are affecting the country’s economy to a great extent and the problem is reaching at serious level.
As stated in the discussion forum held recently regarding illegal trade and related issues, domestic and foreign illegal trade activities are becoming a thorn in the flesh for the contry economic activities.
The Director of Trade Relations and Agreements of the Ministry of Trade and Regional Cooperation of Kenya, Moses Mendaye pointed out that the illegal trade with income and expenditure trade is a concern.
Ethiopia, Kenya to pen agreement to combat illegal trade
Massive harvest forecasted for coffee
Ethiopia’s coffee production is expected to flourish with highs of four folds in the coming harvest season as the rejuvenating initiative is said to reap benefits this season.
Previously, the Ethiopian Coffee and Tea Authority (ECTA) and coffee producing regions conducted massive campaigns for the past four years in order to replace aged coffee bushes whilst rejuvenating others besides expanding coffee farms.
Adugna Debele, Director General of ECTA and scientist on the coffee sector, recently told Capital that the previous years’ initiatives will reap results in the coming harvest season which will begin from the end of October.
He reminded that the major challenge for the Ethiopian coffee sector is production and productivity, “due to that the volume was not sufficient as per the demand.”
“The reason for less production is that our coffee bushes are very old,” Adugna explained.
He explained that in order to boost the trajectory and improve the productivity, the authority with relevant government bodies carried out aggressive movements in the past years.
“Because of the rejuvenation, coffee production has shown slight reduction in years when the initiation was undertaken, but it will give positive changes in the coming year,” the ECTA head said, adding that the production was up to 700,000 metric tons per year in the past few harvest seasons.
In the past four years, aged coffee bushes that covered 400,000 hectare of land have been rejuvenated, while coffee bushes that rejuvenated four years ago have started brewing fruit from the 2021/22 harvest season.
“In the coming year, there will be no bushes that withdraw the production, so in the upcoming harvest season we hope that the production shall shoot up three to four folds,” he elaborated.
He added that the authority is also strongly working to create conducive environment for the market, which is directly related with productivity.
In the past years, particularly in the two budget years, the coffee sector has shown massive improvement in export earnings and even registered yearly records.
In the budget year that ended July 7, the coffee sector surpassed a billion dollars in export revenue and attained USD 1.4 billion with increment of half a billion dollars when compared with the same period of 2020/21 budget year.
The success which was attained in the 2021/22 budget year was not only massive in revenue but also the volume that was exported was extraordinary compared with the history of coffee export.
Therefore, the country was able to ship 300,000 metric tons of coffee in the stated period.
In related developments, a 15-year coffee sector strategy which was developed by ECTA with the support of TechnoServe and Ethiopian Institute of Agricultural Research has been launched.
The strategy targets to expand the country’s export earnings and improve the revenue of farmers that contribute over 85 percent of supply.
Since the reformation of the authority, ECTA has undertaken reform that uplifts the sector development via different instruments. It has also emplaced different proclamation, regulation and different directives that shall improve the farmers’ and the country revenue from the sector. The new strategy is stated as a crucial input to execute different laws in a coordinated manner.
EIMA 2022: Cooperation between Ethiopia and Italy
Agriculture is the fundamental sector of the Ethiopian economy and innovative agricultural machinery can greatly increase the soil’s productivity. This was the theme of the press conference held on Monday July 11, at Hyatt Regency Hotel on the initiative of the Italian foreign trade agency ICE and the Italian federation of agricultural machinery manufacturers FederUnacoma.
The purpose of the meeting was to present EIMA International, the major exhibition of agricultural machinery organised by FederUnacoma, which will hold its 45th edition at the Bologna exhibition centre from November 9 to 13, 2022. The need for agricultural machinery in Ethiopia is vast, as the country’s crops are extensive and diversified. Agriculture accounts for almost half of Ethiopia’s GDP – as noted in the conference, whose speakers included Addis Ababa ICE Director Riccardo Zucconi, First Secretary of the Italian Embassy in Ethiopia Andrea Pascali, and FederUnacoma Deputy Director General Fabio Ricci – and employs 85% of the population. Renewing the agricultural sector – the conference said – means significantly increasing the profitability of production and the quality of life of Ethiopia’s rural communities. Every production, from cereals to oilseeds, to vegetables and fruit, requires specific machines, capable of preparing and carrying out sowing, fertilisation, treatments, irrigation and harvesting.
On show at EIMA are multiple models of machinery and equipment specifically for these crops, many of which are designed specifically to operate in climatic and environmental settings such as those in Ethiopia and certainly more suitable for the country’s small farms. At EIMA International there are about 50 thousand models on display, produced by the more than 1,500 manufacturers present, representing 50 countries. “The exhibition,” explained Fabio Ricci, “is addressed to an audience of professional operators, and is presented with a rigorous product subdivision that envisages 14 sectors of specialisation and 5 themed shows, respectively dedicated to components (EIMA Components), irrigation systems (Idrotech), bioenergy supply chains (Energy), advanced electronic and information technologies (Digital) and gardening and landscaping (Green). To guide visitors through the vast pavilions of the exhibition (120 thousand square metres of net exhibition space) and to promote business relations, the ICE Agency and FederUnacoma are organising targeted visits to the various sectors of the exhibition and “B2B” meetings between trade operators and manufacturers, while a rich programme of conventions and seminars will provide an in-depth look at technical issues, such as those relating to climate change and the management of water resources, which are increasingly necessary and precious.
EIMA International will therefore be attended by an official delegation of Ethiopian trade operators promoted by the ICE Agency and FederUnacoma, and will be attended by dealers, entrepreneurs and technicians in the agricultural sector. Events such as EIMA 2022 are an opportunity to strengthen cooperation relations between Ethiopia and Italy – said Riccardo Zucconi – in a sector such as agriculture that is becoming increasingly strategic in the African setting, to respond to demographic growth and to increase the autonomy of individual countries while also protecting them from geopolitical factors that can jeopardise food supplies. Every cooperation initiative between Ethiopia and Italy – underlined the Embassy representative Andrea Pascali – is set in a very favourable framework, given the excellent relations between the two countries, and the common sensitivity for a development model that aims to increase productivity and welfare, but with the utmost attention to the environment and natural resources that are a heritage to be protected and handed over to future generations.
Tsehay bank to make bright entry late July
Tsehay bank announces its joining the banking sector on July 23, making it the 21st financial entrant.
The bank has amassed almost 780 million birr in paid-up capital from a total of 3 billion birr in subscribed shares through 373 shareholders, having the smallest number of shareholders from other banks in the industry.
Headquartered at Meaza Desalegn building around Lancha, the bank is said to start its operation with 30 branches with 20 of the total located in Addis Ababa whilst the rest will be located at the various regional cities.
Tsehay bank initially held its first establishment general assembly at Sheraton hotel on February 18 2022 after it received permission from the Central Bank to begin selling shares in October 2020.
The bank sold shares at 1000 birr per value while the lowest share sold was at 100,000 birr whilst the highest a shareholder could buy was at 100 million birr.
The National Bank has also approved the appointment of Yared Mesef, who was nominated as the first president of the bank. The president has been serving as the vice president of Dashen Bank before being appointed as the president of Tsehay bank. At the same time, Taye Dibekulu, who was appointed as the Chairman of the Board of the Bank, also served as the Vice President and President of United Bank and is known to be one of the founders of Tsehay bank.
Tsehay bank was among around a dozen banks that were currently under formation in the country. Tshehay will be the third bank to join the market following Amhara and Ahadu bank.
Currently, the banking system in Ethiopia consists of around 1 state-owned development bank, 1 government-owned commercial bank, and 21 private banks. Commercial Bank of Ethiopia holds more than 60 percent of total bank deposits, bank loans, and foreign exchange.
The government plans to open up its banking industry to foreign competition as soon as parliament passes policies permitting it.
