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Gov’t buys 400,000 MT of wheat from Australia

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Negotiating to add 200,000 MT more

Public Procurement and Property Disposal Service (PPPDS) has agreed with Australian government to procure USD 120 million worth high quality wheat, while the final go head will be approved by Ministry of Finance.
Early this year a delegation led by Eyob Tekalgne, State Minister of Finance, that include heads of PPPDS, Ethiopian Trading Businesses Corporation, and Ethiopia National Disaster Risk Management Commission visited Australia, Russia and Ukraine to conduct government to government (G2G) meetings.
On these visits PPPDS agreed with countries to buy strategic commodities directly by cutting out middle men to tackle challenges like high price and delays on procurements.
Based on that the Service strike a deal with the Australian government to procure 400,000 metric tons of durum wheat, which is highly quality than milling wheat with USD 120 million.
Tsewaye Muluneh, Director General of PPPDS told Capital that the price is a little bit higher than other conventional wheat products. Experts said that durum wheat is high quality than milling wheat and that is the reason the cost is a bit higher than the conventional product that the country currently imports.
She said that as per the agreement the amount of USD 120 million will be settled within a year time.
“We are not new to importing durum wheat from Australia,” an expert on the sector told Capital. In the past a pasta factory located in Dire Dawa was using this high quality durum wheat that is also called as pasta/macaroni wheat imported from Australia.
Tsewaye added that in relation with the COVID 19 outbreak the government is working with the Australian government to import an additional 100,000 metric ton wheat at the cost of USD 30 million.
Tsewaye said that the final decision will be given by the Ministry of Finance.
Currently Canada, United States, France, Ukraine and Australia are the top five exporters respectively.
The Director General said that to undertake similar moves from other countries is under process. “The bank to bank relation to commence similar direct procurement with Russia is on the process,” she says, adding that on this scheme the Russian Export Import (EXIM) Bank will represent the country and the state owned Commercial Bank of Ethiopia (CBE) will undertake the process on this side.
“This week CBE has come with its response that will put the process on another step,” she explained. The procurement from Russia would be 100,000 metric tons.
“We shall buy the grain on the G2G manner since we do on other procurements like fuel,” Eyob said few months ago about the decision to buy wheat from governments directly.
PPPDS believes that the direct procurement shall bypass long bidding processes.
The government allocates over half a billion dollar to import wheat. Currently the government is aggressively working to cut the import and introduce massive lowland irrigation scheme targeted to cut the import within three years as of this budget year.

Ethiopian Airlines enhances services with cargo app

Ethiopian airlines announced that it has developed a digital mobile app and chatbot-assisted shipment tracking service to elevate cargo customers’ experience.
“The cargo mobile app is developed by our in-house digital team that has been building up its expertise by developing different applications including our passenger mobile application,” said Mihiretab Teklay, Director, Group Integrated Marketing Communications.
The team has leveraged its experience to develop the cargo mobile app which was launched on April 16, 2020 and is available to download from both Play Store and App Store.
Ethiopian Airlines was Africa’s busiest carrier, making more than 350 flights per day to more than 120 destinations.
To survive from the recent damage the airline is going on a new stream of income, including cargo and MRO business and recently the airline has converted its Boeing passenger aircrafts to cargo.
“We are now focusing on cargo. The cargo business is relatively doing well because urgently required medical supplies are needed all over the world from east to west, north to south and so on. We are also trying to convert some of our passenger aircraft to cargo,” said Tweolde Gebremariam CEO of Ethiopian Airlines.
Ethiopian has seen an increase in the demand of cargo service in the wake of the COVID-19 pandemic. “The customer contact channels we used to serve our cargo customers were less than efficient in the face of the ballooning demand for air cargo service,” says Mihiretab, “that is when our digital experts put their heads together and came up with the cargo app to circumvent the lengthy process and bring the service at customers’ fingertips.”
The initial self-service features of the cargo app include checking flight schedule, cargo tracking from booking to receiving, checking the status of shipments and initiating charter request.
Ethiopian Cargo has extended its reach to 74 destinations globally and caters to charter flight needs in the world; carrying much needed medical supplies in the ongoing fight against COVID-19.
“The pharma wing housed within our cargo facility has been very critical particularly to handle and distribute medical supplies across Africa and beyond as part of the efforts to tackle COVID-19,” added Mihiretab.
Through its facilities and modern freighters the airline is being chosen by the international community as the major cargo partner and suppliers of medical equipments across the world to combat the pandemic.
Recently the airline has successfully distributed the three batches of medical supplies from Jack Ma and Alibaba Group to African countries.
According to Mihiretab, currently, the airline operates over 100 charter flights per month and generate revenue that help it to cope up the current crisis.

COVID-19 could deepen food insecurity, malnutrition in Africa

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Global economic output will be slashed by $8.5 trillion over next two years

The World Health Organization (WHO) expressed concern at the potential impact of COVID-19 on food security, which is likely to exacerbate the already considerable burden of malnutrition in Africa. The impact of the disease is expected to be greater among those grappling with food scarcity and malnutrition, while widespread food insecurity will likely increase due to movement restrictions.
“COVID-19 is unfolding in Africa against a backdrop of worrying levels of hunger and undernourishment, which could worsen as the virus threatens livelihoods and household economies,” said Dr Matshidiso Moeti, WHO Regional Director for Africa in her regular online briefing. “Hunger and malnutrition heighten vulnerability to diseases, the consequences of which could be far reaching if not properly addressed.”
In Africa, it is estimated that one in five people is undernourished, and that 30% of children under five – approximately 59 million children – have stunted growth, greater than the global average of 21.9%. Wasting occurs in approximately 7.1% of children in Africa. The continent has the highest burden of malnutrition compared with other parts of the world, in terms of percentage of the population. While there has been little research so far into malnutrition as a co-morbidity for COVID-19, people with weakened immune systems as a result of undernourishment are at greater risk of a range of serious illnesses and so are likely to be more severely affected by the virus.
Recent estimates of food insecurity have suggested that as many as 73 million people in Africa were acutely food insecure. COVID-19 is exacerbating food shortages, as food imports, transportation and agricultural production have all been hampered by a combination of lockdowns, travel restrictions and physical distancing measures.
In a separate news according to the United Nations World Economic Situation and Prospects (WESP) mid-2020 report, the global economy is projected to contract sharply by 3.2 percent this year.
The global economy is expected to lose nearly $8.5 trillion in output over the next two years due to the COVID-19 pandemic, wiping out nearly all gains of the previous four years. The sharp economic contraction, which marks the sharpest contraction since the Great Depression in the 1930s, comes on top of anemic economic forecasts of only 2.1 percent at the start of the year.
The report estimates that GDP growth in developed economies is expected to plunge to -5.0% in 2020. A modest, 3.4% growth – barely enough to make up for the lost output – is expected in 2021. World trade is forecast to contract by nearly 15 per cent in 2020 amid sharply reduced global demand and disruptions in global supply chains.
The report also stated that the pandemic will likely cause an estimated 34.3 million people to fall below the extreme poverty line in 2020, with 56% of this increase occurring in African countries. An additional 130 million people may join to the ranks of people living in extreme poverty by 2030, dealing a huge blow to global efforts for eradicating extreme poverty and hunger. The pandemic, which is disproportionately hurting low-skilled, low-wage jobs, while leaving higher-skilled jobs less affected – will further widen income inequality within and between countries.
Facing an unprecedented health, social and economic crisis, governments across the world have rolled out large fiscal stimulus measures – equivalent to an estimated 10 per cent of GDP – to combat the pandemic and minimize its livelihood impacts. However, the depth and severity of the crisis foreshadows a slow and painful recovery.
Elliott Harris, UN Chief Economist and Assistant Secretary-General for Economic Development stated that “The pace and strength of the recovery from the crisis not only hinges on the efficacy of public health measures in slowing the spread of the virus, but also on the ability of countries to protect jobs and incomes, particularly of the most vulnerable members of our societies.”
The report also highlights the pandemic could foster a new normal, fundamentally reshaping human interactions, inter-dependence, trade and globalization, while accelerating digitalization and automation. A rapid surge in economic activities online will likely eliminate many existing jobs, while creating new jobs in the digital economy. The net wage and employment effects could be negative, further aggravating income inequality.