Ethiopia has been stated as a country with a huge potential when it comes to fruits and vegetables in addition to other agricultural products. Experts opined that despite there being an occurrence of huge changes in the sectors growth over the years, there lie’s a huge untapped potential waiting to be reaped. In his latest appearance in parliament, PM Abiy Ahmed likewise echoed the huge potential of the country as he explained that the country covered a quarter of its food supply through import.
The PM further pointed out that the country not only has the potential to fully feed itself, but also have surplus that may be used for export. “How come we import mango?” he rhetorically asked.
The top leader has taken different initiatives to boost agricultural productivity and fruit tree development through the ‘green legacy’ initiative, a greenery campaign that includes planting of fruit trees throughout the country.
Besides that the government is pushing investors to engage on agricultural investment to the local and export market.
Of that, the avocado and other fruit development is hoped to be one of the major export earnings of Ethiopia that is not only carried out by smallholder farmers but also huge investments like mechanized farming located at southern Ethiopia.
The Dagne agricultural facility located about 70 km southwest of Hawassa town, has poured in huge investments to produce agricultural products like improved seeds, dry season wheat, and different type of fruit trees.
Dagne Daba, who developed four adjacent farms located at the western Bilate River bank and northeastern edge of Abaya Lake, Welayta Zone of SNNP, said since he secured the farm, which was partly owned by Genale Agro-industry, on foreclosure from Commercial Bank of Ethiopia, has started the clearing and plantation activities of millions of fruit trees and other cereal production.
He told media that he decided to engage on agricultural investment besides his other businesses, by citing his inspiration, “I am engaged in export business like coffee and also logistics activities, but on my pilgrimage to Israel I got a chance to visit an orange and mandarin farm in arid areas, which drew me to this investment.”
“I was very impressed on my visit and that inspired me to be involved on such kind of investments in my country,” he recalled what sparked his initiative.
“Ethiopia has favorable climatic conditions and fertile land, which I believe is better than Israel, so I was very eager to be involved on farming,” he says, adding, “the country has potentials like land, experts and other relevant condition to conduct modern agriculture.”
He said that currently the farm which mainly is cultivated on the Abaya and Bilate area is about 2,500 hectares. So far the farm is covered by 1million trees of avocado, 1.5 million banana tree plantation, 500,000 papaya trees, ten thousand orange trees, and other plantations.
He said that most of them have been planted in less than a year ago, since the possession of the farmland is only a year old.
In the coming year we expect the avocado trees to bear high quality fruits for local and export markets.
In the beginning the investor imported about 20,000 orange stems from Uganda for cultivation, “but now the small tree from Upper Awash, the only mechanized Valencia varieties of orange plantation in Ethiopia, has been bought and is being transported to the farm to be planted.”
The total orange plantation will be 100,000 in the coming few months and is expected to mature and bear fruit in two years time.
The papaya that is already providing fruit will be harvested for the coming four years and a single stem shall produce four quintal per annum.
“So far the papaya harvest that is being supplied to the local market is covering the cost for labour,” the investor said.
“We hope that the tree plantation in general will provide massive harvest in the coming season,” Dagne confidently stressed, adding that the government should focus on eliminating the middlemen, who do not have any value addition on the production cycle or market linkages.
“We shall provide agricultural commodities at affordable prices, meanwhile middlemen get involved to double the price which is not fair,” he expressed his concern.
“I am sure the papaya plantation shall cover half of Ethiopia’s demand, similarly the banana cultivation has a potential to stabilize the local market with fair price if the illegal market actors involvement is avoided,” he said, adding, “I think when the harvest season comes in next month, every day up to 20 trucks shall transport the bananas, which is a new type of plantation that shall meet the export market.”
He said that a single tree can produce on average 80 kilos of banana fruit.
The plantation invested huge amount of money to access different type of seedlings; for instance the farm imported the ‘Grand Nain’ banana seeds variety from Israel by itself and it provided for seedlings to a company located at Bishoftu town to cultivate the plant and provide the plant at the cost of 75 birr per seedling, but the cost was not inclusive of transportation and other related expenses.
Similarly the farm spent 200 birr for each avocado variety seedling, “some portion of the seedlings have consumed up to 350 birr.”
The farm has also different fruits like pomegranate and sugarcane, “we have 2,000 pomegranate tree that shall reap produce in the coming few months.”
“We will expand the fruit plantation in the coming years once the existing trees provide the needed seed varieties,” Dagne says, adding, “In the past, we have invested huge amounts to get the improved seedling but that is now in our hand for expansion.”
Besides fruit production, the farm has also been engaged on production of cereals that have been exported in the preceding harvest season and cultivated and provided wheat seeds for the seed distributors.
Currently, the farm is engaged on improved maize and beans seed production that will be distributed for farmers in the coming harvest period.
According to the investor, the improved maize seed might cover at least ten percent of farmers demand for the upcoming harvest season.
“Different type of improved maize seeds including Shone-pioneer variety is cultivated on over a thousand hectare in Abaya farm and 400 hectare at Bilate and will be provided for Ethiopian Seed Enterprise and other partners,” he explained.
“We use irrigation production rather than rain feeding scheme. I estimate the farm would produce up to 50,000 quintal of improved maize seeds,” he elaborated.
In the past dry season the farm has cultivated improved wheat seeds for SNNP Seed Enterprise, “which is now distributed for farmers for this farming season.”
Through apiculture agricultural activity the farm has over 500 beehive boxes that will produce honey for local and international market.
To smooth the agricultural activity in the dry season the farm has drilled six water wells and additional six will be followed.
The farm is also preparing about three huge water pools in different location of the plantation as a reserve for emergency, “the reserve shall be an alternative if power outage or generators malfunctioning occurs.”
There are six main group leaders in different corners of the farm and under the leaders about 3,000 labourers are involved on the day to day agricultural activity. Besides that 20 senior agricultural experts are fully assigned for follow up on the cultivation activities.
“To be honest, we did not estimate the total cost that the farm has so far consumed; for instance the well drilling consumed over 200 million but it needs additional expense like electric transmission lines, transformers and other costs to pump the water,” he explained the costs incurred to develop the farm.
He cited another example that the cost for banana tree support, which keeps the plant from falling in the fruit making period, cost about 16 million birr.
“We want to see small size recreation centre and training facility at the plantation,” Dagne also said, which will enhance the farmers and workers capacity.
At the heart of the farm there is a hot spring which the owner designed to make it a destination for interested visitors, to not only visit the plantation but also enjoy the hot water while at it.
Dagne expressed his delightedness to see that his activity attracting other big investors to follow same path at similar locations, and hopes that this would have a huge ripple effect in not only feeding the country but also providing for export and generating the much needed foreign currency for the country.
Tapping the agri-sector to reap benefits, success stories from flourishing farms
MLA transitions to a De-Jure law firm
Mehrteab Leul & Associates Law Office (MLA) announced the firm’s conversion from a sole proprietorship to a De-Jure law firm Mehrteab & Getu Advocates LLP (MLA) becoming one of the first limited liability partnership firms.
On Tuesday July 5, 2022 in an event held at the Sheraton Hotel, the firm officially announced its launch with the presence of prominent government officials, local and international clients of the firm, and other stakeholders. This makes the firm one of the first law firms and the first corporate law firm in the country.
MLA is one of the leading full-service law firms with 25 years of experience that focuses on corporate legal services. The firm provides services for the business community, including international companies interested in working in Ethiopia. It offers specialized services such as corporate, employment and immigration, finance, intellectual property and technology, private equity, projects, energy and infrastructure, hospitality and leisure, real estate, regulatory and government affairs, non-governmental organizations (NGOs), aviation, tax, and litigation. MLA advises its clients and performs legal services like drafting legal documents, processing licenses, and other legal services the client requires. The firm also has over 300 corporate clients.
The conversion comes after Ethiopia’s new sanction of the Federal Advocacy Service Licensing and Administration Proclamation No. 1249/2021 (Advocates Proclamation).
“MLA is now crossing a big milestone by its conversion,” said the founding partners, Mehiretab Leul and Getu Shiferaw. “Under the newly adopted home grown economic policy of the country the private sector is expected to have a big role in the development meanwhile this policy shift cannot be realized without the role of law firms,” said the founders.
Ramis Bank gets the nod in licensing
National Bank of Ethiopia (NBE), financial sector’s regulatory body, has approved the working license of the upcoming interest free bank (IFB), Ramis Bank to operate as an alternative financial sector on the promising IFB space.
The bank which filed its license request to the industry’s supervisory body early October last year disclosed that it has received the green light early this week.
According to the information that Capital obtained from Raims, which got its name from one of the biggest tributary of Wabi Shebele River and one of the largest rivers in eastern Ethiopia, said that the license was obtained under the founding president, Ali Ahmed.
Ali, 48, an MBA graduate from University of Greenwich, has worked at Awash Bank for 18 years from the clerk level up to the director level before moving to the Commercial Bank of Ethiopia (CBE) for an assigned senior position.
The founding president has an ocean of experience in the financial sector having as served the state owned financial giant and long established, CBE, which over the years has contributed to several leaders in the sector.
Ramis Bank which conducted its founding general assembly in October 2, 2021 with its roughly 8,000 shareholders has enabled to accomplish its formation process prior to the deadline of NBE directive which uplifted the founding capital to five billion birr.
In April, 2021 NBE had revised the minimum paid up capital of the banking industry from 500 million birr to five billion birr. But, under ‘minimum capital requirement for banks: directive no. SBB/78/2021’ it has called banks that are on their formation process to finalize their process with 500 million birr paid capital and to request for licensing until Tuesday October 12.
On its formation, Ramis Bank had successfully secured 724 million birr in paid up capital to realize its operation.
According to Ramis, it has already carried out the implantation of core banking systems that would be crucial to commence its coordinating banking services through its branches.
Experts in the banking industry told Capital that the bank will fully commence operation by the beginning of the coming Ethiopian new year as an alternative exclusive banking service providing IFB banking services, which has now been expanding over the short period, following the central government opening the sector as a democratic right of citizens who want to engage on business that they prefer.
It is recalled that investors who want to establish exclusive IFB had been banned by the government for over a decade, while the central government has now eased the issue, with so far three banks including Shebele Bank, which is evolved from Somali Micro Financing Institution, operating on the exclusive banking sector. Ramis will be the fourth IFB.
Erecting Oromia Insurance’s Skyscraper
Oromia Insurance S.C. / OIC/ was established and licensed by the National Bank of Ethiopia and commenced operation on 9 February 2009. It was established by 540 founding shareholders with subscribed and paid up capital of birr 85 Million and 26 Million, respectively. The company introduced different products at different times to meet the needs of the society.
OIC started the first of its operation with General Insurance in 2009. With inspiration to reach the low income farmers and pastoralists, OIC introduced Agriculture and Microinsurance in 2010. To impact the livelihood of the society, OIC commenced Life and Health Insurance in 2011. To meet the interest ofthe Muslim society and comply with sharia rules and principles, OIC introduced and commenced Halal Takaful Insurance,very recently in 2022.
This is indicative of the fact that the company commenced operation with strong and reliable financial capacity which makes it the first of its kind to mobilize such a highest amount of paid up capital in the country’s insurance industry. OIC has over 1,098 total shareholders. Moreover, the diversity of its shareholders, with more than 1,600,000 low income farmers and pastoralists through their farmers’ cooperative unions, speaks about its strong social base.
The Company, with a clear vision of becoming a leading private insurer by 2030 in Ethiopia, has crafted a suitable mission that is, ‘customized to address the insurance needs of its customers’ and has also developed a stretched strategic plan to make sure its vision is realized.
Oromia Insurance (S.C) believes that the quality of its workforce is cardinal to its success. As a result, it boasts of an energetic executive management team with an ocean of insurance experience and leadership skills. The Company’s human capital, in general, comprises bright young, diligent and loyal employees who are committed to ensure the quality of customer services. OIC human capital is of diverse backgrounds and well trained to cope up with demanding and dynamic customer services needs usually manifested in customer satisfaction with underwriting and claims processing services.
OIC is relatively young, but has a very strong financial capacity, with an authorized capital of 1 billion birr, subscribed capital of 945.68 million birr, paid-up capital of 642.66 million birr and a total asset as of March 2022, of 2.13 billion birr. To modernize its services in 2021, the insurance has started construction of its own headquarters.
Capital’s Metasebia Teshome caught up with Zeleke Belay (Architect), CEO of Zeleke Belay Architects, and Efrem Abdissa (Eng.), Project Manager (OIC) for insights on the current progress of the up and coming skyscraper at the throbbing metropolis in the capital. Excerpts;
Capital: Describe to us the architectural masterpiece being erected at the heart of the central business district as well as its features.
Zeleke Belay: We are living in exciting design times as a country where we can draw out an elegant tower out of an unusually elongated plot. With regards to the overall design, the natural triangular tip of the site was exploited to generate the tower geometry. The anchoring core shifts in the grid angle to maximize tower footprint extending to both ends of the plot boundary. It then rises up and loops atop unifying the tower. Together with the chamfered triangular tip forms an iconic character, identifiable in the city skyline of the nation’s capital.
A unique addition to the complex is the sky bridge at the top of the tower. It is customary in many cities to climb to high-rise buildings and enjoy the beautiful scenery of a city. OIC tower shall be one of the high points in Addis. We thought to add few extra floors and exploit the natural geometry of this building and provide such a touristic attraction to the building. The master plan has designated this area as a free height zone.
Having four basements, the building will be located between the premises of the Ethiopian Coffee, Tea Marketing and Development Authority and the Federal Small & Medium Manufacturing Industry Development Agency across from the Wabi Shebelle Hotel.
Expected to rest on 3,004square meters of land near Mexico Square, the building is estimated to cost the insurance firm somewhere between 1.5 billion birr and two billion birr, dependant on inflation. The building is slated to be completed in three phases: shoring and excavation; structural work; and finishing.
The main building is a skyscraper with 40 floors and will have 5 basements, of which four will be parking floors whilst the other will provide special services. And there will also be a side building.
It will be enough to handle all the services rendered by the owner, OIC, and will benefit others through renting of the property for other commercial services.
Capital: Who is the lead contractor? What are the timelines of the construction period? What personally is your role in the construction?
Zeleke Belay: The construction is being spearheaded by the top notch contractor which is the Chinese state-owned firm that is constructing major buildings in the country, Jiangxi Corporation for International Economic and Technical Cooperation. The project is expected to cost 1.1 billion birr for the 35-storey building at the heart of Mexico Square.
With regards to the project timeline, we are expecting it to be completed within three to four years time. As for me, I am the lead architect and CEO of Zeleke Belay Architects. After my design firm won the design bid floated in 2018, we came up with the design that you see coming to fruition today. Currently, we are supervising the construction of the building.
Capital: What stage is this grand project at?
Zeleke and Efrem: We are pleased to state that we have successfully laid the crucial part, which is the foundation, as a result we have completed close to 20 percent of the project.
The deep foundation that was completed was at the back of a hard work and effort which was pulled in for 5 consecutive non-stop days without interruption for 24 hours. This workmanship is extraordinary and can go on record as the deep foundation took more than 3 million Kilos of cement (30,000 quintals) to construct in the span of 5days.
Of course there is a myriad of challenges that had to be overcome to realize this success, as we all know of the cement shortage in our country, in addition to the rainy season which is tricky when it comes to constructing a foundation of this magnitude. This success is attributed by the different skills of labor present during the construction both during the day and night shifts, and this sense of construction stewardship will continue until the construction is 100 percent complete over the coming couple of years.
Capital: Prices of construction materials are soaring, and in addition the shortage of cement in the country has posed big challenges to the construction sector. How are you facing these hurdles?
Zeleke and Efrem: It has taken concerted efforts of all involved in the project to face all the challenges that we are currently facing so as to deliver on this project. We are currently on a stage where we can’t stop construction because of such challenges, even though the cement prices are high and scarce in the market, we have to make use of what we have got.
Capital: What is your evaluation of the project with the perspective as a project manager from the owner’s side?
Efrem Abdissa: Of course we are aware of the challenges that have heaped the construction sector, stemming from cement price hikes and shortages to rise in other construction materials as well. Even for the just completed foundation phase there was need for special type of construction materials of which prices were high, but it’s safe to say given the circumstance the progress of construction is on a brilliant trajectory.
As earlier stated, given the workmanship and diligence that has been seen in getting the foundation done, we expect it to be completed within the planned time.
Capital: What are the main challenges you are facing in the construction phase thus far?
Efrem Abdissa: Besides shortage of construction materials, the rainy weather has also presented challenged which however have been swiftly mitigated. Another challenge is that the area of the construction is at the heart of the city which is known for its traffic jam, which logistically presents some challenges. Nonetheless, with the help of the Addis Ababa traffic management office, we are coping up the issue as they have assisted immensely in helping us out.
With the crucial stage in the foundation having been successfully completed, I believe the remaining stages will go on smoothly, without any hick-ups.
