By our staff reporter
During a discussion with media leaders on Thursday, August 4, Prime Minister Abiy Ahmed expressed Ethiopia’s ambition to become the world’s third-largest exporter of coffee. Currently ranked as the 8th largest coffee exporter globally, Ethiopia has been diligently working towards this goal. In recent years, millions of coffee seedlings have been planted in the country, reflecting a strong commitment to the industry’s growth. Prime Minister Abiy expressed his hope that within the next two to three years, Ethiopia will successfully ascend to the coveted position of the third-largest exporter of coffee beans.
In 2021, Oromia signaled continued expansion of seedling coffee and replacement of decades-old trees. In its recent article, the World Bank (WB) said that almost 80 percent of Ethiopia’s 1 million hectares of coffee trees were underproductive because the trees were not trimmed often enough.
According to the WB article, the quality of Ethiopian coffee isn’t the problem. About 95% of production from the country’s diverse coffee varieties is organic, traditionally cultivated without the use of pesticides and fertilizers. Demand isn’t the issue either.
The article however questions, why is Ethiopia’s coffee productivity lagging behind other leading coffee-producing countries such as Brazil, Colombia, Indonesia and Vietnam? As the research shows, the problem boils down to a lack of pruning.
Shimelis Abdisa, President of Oromia region, back then said that unlike the preceding trend for the past couple of years the regional administration has given fundamental attention for the bean production and productivity.
“In general, previously, the Ethiopian government was only generating revenue from coffee but not investing on it. The farmer was the only actor on the total production activity,” he said.
The WB said that the low productivity of Ethiopia’s coffee trees poses an obvious problem for the more than 2 million smallholder farmers dependent on coffee production for their livelihoods.
Shimelis said due to different reason including the trading scheme, the farmers’ revenue from the bean have been declaimed that led them to cut the coffee bush and replace them with alternative profitable crops.
“Based on understanding the farmers and the sector challenges, the regional government is taking action to come up with a solution,” the regional President said.
“In our region for the last two years we have introduced three major changes on the sector. Basically we have improved the marketing system by creating alternative trading for Ethiopian Commodity Exchange by issuing an export license for the farmer enabling them for direct export which also contributed to reduce the illegal trade,” Shimelis told Capital.
“The new trading plays a key role. It has shown positive results for instance the price of red cherry that was 12 birr per kg in the past has now reached 30 birr because of the new scheme,” he explained.
The other initiative introduced in the past two years was rejuvenating and replacing the aged and unproductive coffee trees by new seedling.
The regional President said that the coffee trees in the region are aged up to 40 year, which is a factor for small harvest.
“Rejuvenate existing trees by trimming and replacing of the old trees and seedling new coffee trees in new areas has been conducted for the past two years,” he said.
“In 2019, we have planted over 800 million new coffee seedlings, 900 million in last year and in this rainy season we will plant 1.1 billion coffee trees in the region,” Shimelis elaborated.
The World Bank article said that different initiative have been involved to elevate the challenges like Stumping involves pruning older and less productive trees down to just a stump. “This stimulates the growth of new sprouts that develop into new branches within a few months,” it added.
According to the region’s plan, the target is increasing the coffee export by two folds in minimum in the coming few years. “In the past budget year for instance for the first time in the region the coffee export have increased by 17 percent and in this year it is expected to climb to 19 percent,” he explained.
In the coming budget year the export is estimated to be boosted by 25 percent because the seedling that was planted two years ago will have started production.
The price increment at farmer’s level under one of the three pillar of change for the sector has also discouraged the illegal market. The effect on the illegal channel is said to contribute to attaining the target set for the coming year.
Ethiopia eyes to bag third spot in coffee export market
New World Bank chief visits Ethiopia
Despite Ethiopia’s whirlwind of challenges in the past few years, the World Bank President has cited that the country’s economy has managed to come out of the downturns and is now at a relatively good place.
On his first visit to Ethiopia, and Africa from July 31to August 2, Ajay Banga, President of the World Bank Group, who took office, early June, met with top government officials and visited several economic sites besides having a meeting with private sector professionals.
Whist addressing the media, Ajay pointed out that despite all the natural challenges that Ethiopia has been through, including the pandemic and social challenges, which dented the economy, the country has managed to go unscathed.
Regarding the economic challenges, Banga cited that the case was not only singular to Ethiopia but has affected other countries as well, “All countries today have challenges because of rising interest rates. There are challenges around servicing debt. There are challenges around the future macroeconomic growth projections as well.”
As he put it, “Development with indigenous integration for economic growth with the private sector and farmers is integral.”
“The Finance Minister and the Central Bank Governor were speaking to the idea of bringing in foreign capital and domestic capital into banking. Now, this is not easy. These things take time in an economy that is changing in its construct from what it was for the last few decades to where the Prime Minister and his government would like it to go,” the World Bank president elaborated.
After his visit to the industrial park at Bole Lemi, including the malt factory, he stated that, “It is interesting to see the effort that the government is putting on indigenous development of the raw material that goes into these factories. Not only should we be focusing on importing things and exporting them, but also actually encouraging the local production of these items and not just local production as taking the raw material and exporting it, but value added manufacturing locally so that this is not an extractive economy, but a job creating value added economy for the future.”
According to Ajay, there are opportunities to look at in value added manufacturing attached to the agriculture.
“There are opportunities to look at the private sector and the mobilization of the private sector,” he opined.
As Ahmed Shide, Minister of Finance, pointed out, the World Bank has been associated with Ethiopia’s development as the biggest long term development partner of Ethiopia involving in many sectors, whether it is infrastructure or social development, digital development, or regional integration as well.
“As Ethiopia moves along intensifying its reform activities and expanding growth, we are going to work with the World Bank in diversifying our source of growth in bringing in more private capital into the economy,” he added.
He reaffirmed that his ministry will continue on its reform paths, economic growth, national unity and sustainability of peace building to continue as a regional anchor for stability and unity.
“We believe in the future of this country. So the idea is, what can we do to be helpful as the PM and his government navigates the future of the next few years,” the World Bank President said.
MoF disclosed that the President’s meeting with Ahmed at his office was to discuss on various issues of mutual interest, including Ethiopia’s development priorities and the various areas to enhance the partnership between the World Bank and Ethiopia.
Ahmed briefed Banga on the opportunities and challenges of implementing the Second Home-Grown Economic Reform (HGER 2.0) agenda to accelerate economic transformation through improved productivity and competitiveness.
According to MoF, the Minister requested support from the Bank for the ambitious reform agenda in light of the macroeconomic challenges and development needs of the country.
Ahmed also shared some of his expectations from the Bank’s reform process, including the importance of aligning it with the urgent needs of low-income countries, especially given unprecedented poverty challenges.
According to the President, Ethiopia is the second IDA recipient location in the world.
Africa’s Large Informal Economy a Key Element of Strategies to Eliminate Plastic Waste
Jacques Vermeulen
Plastic waste is a growing problem globally, with up to 12.7 million metric tons of plastic entering the oceans each year1. Plastic packaging is also an essential part of our modern lives, supporting efficient, safe and hygienic food value chains, among other important applications.
On a continent where food safety is an abiding concern, this means plastic packaging will continue to have a role for some time to come, and the focus must be on eliminating plastic waste.
Creating a viable circular economy for plastic waste is a key strategy to address this problem.
The circular economy promotes the re-use and recycling of products and materials, creating a closed-loop system that minimises waste and pollution. The circular economy offers a unique opportunity to address post-consumer plastic waste in Africa by keeping plastics in use and out of the environment.
Africa also has an unusually large informal economy, with the International Labour Organisation estimating in 2018 that 85.8 percent of employment on the continent is informal.2
This includes a vast network of waste pickers who collect and sort recyclable materials, creating a key component of a circular economy for plastic waste that both generates employment and reduces plastic pollution.
Integrating waste pickers into the formal waste management system, by providing training, equipment and a reliable income, can improve their working conditions and increase economic opportunities for marginalised communities.
At the same time, by reducing waste and increasing resource efficiency, the circular economy can reduce the reliance on virgin resources and create a more sustainable future for all.
This requires a significant investment in infrastructure, technology, and education. Governments, businesses, and civil society must work together to create an enabling environment for the circular economy to thrive.
This includes policies that incentivise the use of recyclable materials, regulations that require producers to take responsibility for their products’ end-of-life, and public education campaigns that raise awareness about the benefits of the circular economy.
Coca-Cola Beverages Africa (CCBA) has made a commitment to invest in our planet and our packaging, to help make the world’s packaging problem a thing of the past, working in partnership with The Coca-Cola Company which launched a sustainable packaging initiative called World Without Waste in 2018.
We are rethinking how our bottles are designed, collected, recycled and repurposed as part of our World Without Waste vision, with the following global goals:
- Help collect a bottle or can for every one we sell by 2030
- Focus on making all our packaging 100% recyclable by 2025
- Make 25% of our packaging reusable by 2030
Understanding that we can’t do this alone, we partner with like-minded bodies to shape policy and leverage our combined scale.
Poor waste disposal is everybody’s problem, so everybody needs to get involved.
One of the most valuable environmental interventions in addressing poor waste disposal and achieving circularity is setting up the right Extended Producer Responsibility (EPR) mechanisms and policies.
In the EPR model, producers pay fees to a producer responsibility organisation, or PRO, such as PETCO.
By creating value for post-consumer waste in this way, waste collectors or municipalities are incentivized to gather and return it to buyback centers, who then deliver it to the recyclers.
So far, through effective industry partnerships, we have implemented voluntary EPR models in four of our markets and helped create organizations like PETCO South Africa, in Kenya, Ethiopia, and Tanzania, and soon to be established in Uganda as well.
The EPR in Ethiopia model has made it possible for PET bottle collectors and recyclers to collaborate as well as for manufacturers like CCBA Ethiopia to achieve their producer responsibilities by promoting PET bottle collecting and recycling.
We are also improving the recyclability of our packs through a strong emphasis on shifting to homogeneous and clear bottles and have made significant progress on this already.
To clean up existing packaging, we’re bringing people together through programmes like beach and river clean ups and other ongoing local activities. To encourage more people to recycle more often, we’re investing to help people understand what to recycle, how to recycle, and where to recycle.
We understand the benefits of assisting the whole collection value chain, from garbage collectors to buyback facilities and recyclers. For this reason, CCBA Ethiopia has implemented a wide range of initiatives to support the collection, segregation, and recycling of PET bottles in different areas. CCBA
Ethiopia has implemented a number of interventions to support the collection and recycling of PET bottles, including the transition from the iconic green Sprite bottle to the clear bottle that is leading the industry, a similar move by Ambo Mineral Water S.C., subsidiary of CCBA Ethiopia, the establishment of the Entoto Park Waste Collection Centre, the creation of the Ambo and Sebeta Model Collection Centres, and the implementation of 10 million ETB subsidy support for collection centers.
The opportunity to grow employment in Africa through a circular economy for plastic waste is clear. In Ethiopia alone, an approximate 5000 people benefit from collection and recycling activity that is supported by CCBA-Ethiopia.
Scaling up the EPR model across the continent will go a long way towards addressing unemployment and poverty, while also removing plastic waste from the environment.
Djibouti asserts maritime dominance with a naval garage
The Djiboutian sovereign wealth fund, Great Horn Investments Holding (GHIH), rolls the dice to realize its strategic 2035 vision for its blue economy investment courtesy of a Ship Repair Yard.
This new project now sees Djibouti firmly head and shoulders above the rest with its geo-strategical advantages as a regional hub for the transshipment and relay of goods flowing along the major international shipping lanes connecting Asia, Africa and Europe.
On Monday July 31, a naval repair boat integral to the success of the project docked in Djibouti. The ship of large dimensions, which is in the format of an “aquatic garage” is equipped with all the provisions useful for repairing breakdowns, damage and malfunctions to which any ship, private, commercial or military, is subject.
“With this new device, our country increases its capacity to definitively combine all the services relating to the maritime economy”, stated President Ismaïl Omar Guelleh during the event held early this week, adding, “With the acquisition of this naval repair boat, our country has access to a strategic device, which it aspired for, for several decades.”
The shipyard’s repair and maintenance capability is expected to attract more ships to Djibouti, further cementing its position as a regional trade and logistics hub.
The scope of the Project includes the construction of a large floating dry-dock for vessels up to 217 meters-long, workshops, tools and equipment to serve a broad variety of vessels, providing common vessel maintenance and repair services, such as surface treatment, metalworking and maintenance of equipment and machinery.
The Hague, a Netherlands based Invest International Capital (IIC) provided the long-term financing solution for the construction of the ship repair yard and its completion in Djibouti. The financing was structured on the back of an Export Credit Agency cover from the Atradius Dutch State Business.
Djibouti Ports and Free Zones Authority said that Djibouti Ship Repair Yard ambitious project follows the ‘Vision 2035’goal and aims to create up to 3,000 jobs. It added that the 217m long, 43.5m wide dock was built by Damen Shipyard, a global leader in shipbuilding based in Gorinchem, Netherlands.
“It has a lifting capacity of 20,100 tons. This cutting-edge facility will provide crucial repair services for large vessels. Djibouti’s strategic location at the crossroads of major shipping routes makes it the perfect hub for global trade,” it added.
The Ship Repair Yard and floating dock, wholly owned by Great Horn Investments Holding, are part of the continuous effort to establish Djibouti as a world-class maritime and port services hub.Over 40,000 ships pass through the Bab El Mandeb Strait each year.
With a capacity of 50,000 tons, the naval garage put into service in Djibouti far exceeds the provisions of its unique counterpart in the whole region.
