Intrade UK Ltd, a British company made an agreement with the Ethiopian Investment Commission to open a USD 100 million investment on spinning and making textiles in Mekele Industrial Park in a 10.5 hectare area.
The Mekelle Industrial Park is the third of its kind to be inaugurated after Hawassa and Kombolcha Industrial Parks – it is primarily used for textile and apparel factories.
Construction is expected to be completed after 18 months and when it begins operating it should create job opportunities for 1,300 local people.
According to the agreement made by Wagdi M. Mahgoub, CEO of Intrade UK Ltd and Fitsum Arega, Investment Commissioner the products will be made for export.
Intrade UK is in the process of constructing and working on edible oil and pharmaceutical factories at a cost of USD 100 million. In addition the company is looking at starting a cotton farm here.
Fitsum Arega said, “The textile factories working in the industrial parks in Mekele, Kombolocha, and Hawassa need to obtain their supplies quickly but currently they import from Asia, so the coming of Intrade UK will help them obtain it from here.”
He added that his office will strongly cooperate with other foreign and local investors to support other businesses at the industrial parks.
Mahgoub said the company will do its best to start production on time.
“We have a lot of experience and our presence in Ethiopia will help the industrial parks, we also conduct other business in the country.”
Currently Chinese companies have taken up 80 hectares and two companies from the UK and one from Italy are working on similar projects.
Ethiopia has set a target of USD 30 billion in export earnings by 2030 for the country’s textile and garment sector.
The country’s industrial park investment has reached over USD 4.2 billion with an added USD 900 million investment from the previous year’s performance and 80 ,000 people work in the textile sector.
Intrade UK to open textile factory in Ethiopia
Condo winners complain as many new condos need massive renovation
New condominium homes transferred under the 40/60 program have already had doors, windows, ceramic floors, kitchen and toilet materials demolished and replaced due to poor quality materials, Capital learned after a recent visit to homes.
Addis Ababa Saving Houses Development Enterprise (AASHDE) spent more than 150,000 birr per house to install finishing materials and so far 90 percent of the homes have had them replaced.
AASHDE engineers said that over 130 million birr in ceramic and other materials have been demolished at Crown and SengaTera sites.
An elderly lady who met Capital while she was demolishing the door said that the finishing materials in her house were made with poor quality.
“We paid nearly one million birr to CBE for this house but the government is using low quality materials for our house and most of the people are replacing them with better quality materials.”
Tameru Abera, an engineering expert said the people are changing the material so they can sell the condos at a better price.
“The condominiums are not being used as indented, the 40/60 scheme was started for the middle class but people are paying from 800,000 to one million birr and then they are renovating them. The government should not have registered these people in this program, it is better for them to buy land and to construct their own home.”
Capital asked Yohannes Abayneh AASHDE Communication head about the quality of the finishing materials and why the enterprise did not let the house owners do the work themselves.
“We are fixing the materials based on the design, we can’t work like the five star hotels, what we fix has to take into consideration the money we have. Our agreement is with CBE and they are commanding us to do the finishing work.’’
The prices of the 972 recently transferred houses will soon increase by 124,000 birr. The Commercial Bank of Ethiopia says this additional cost is just an interest payment.
With the increase two-bedroom buyers will add 91,470 birr and three and four bedroom buyers will add 110, 650 and 124,000 birr respectively to the total prices of the homes.
Currently 38,000 of houses in the 40/ 60 program are under construction.
Bahir Dar Hotels allowed one year extension on loan payments
Occupancy rates drop to 15 percent
After discussions between the Amhara Cultural Tourism Bureau and the Commercial Bank of Ethiopia the seventeen members of the Bahir Dar Hotel Owners Association are being allowed to extend their bank loan payments for a year after they were hit by a decreasing number of visitors.The hotels had borrowed the funds for construction and expansion projects.
When hotel owners complained to the Tourism Bureau about the low hotel occupancy rates, the Commercial Bank of Ethiopia and other private banks only required the hotels to pay off interest on their loans. They will have to restart paying off the principal at the start of next Ethiopian year.
On October 9th, 2016, following the unrest in Amhara Region, the ruling Ethiopian People’s Revolutionary Democratic Front declared a six-month state of emergency, which was extended by four months at the end of March last year. Since that time there have been violent incidents in the area.
The unrest and the state of emergency are the primary reason fewer tourists and other visitors have traveled to Bahir Dar. This has affected occupancy rates of hotels. Last fiscal year 880,000 tourists visited Ethiopia. That is a decrease by 50,000 compared to the previous year.
Mulugeta Bazen, President of the Bahir Dar Hotel Association told Capital that over the last 18 months, hotel occupancy rates have been below 15 percent.
“My hotel has 70 rooms and before the unrest most of them were occupied. Now between one and 5 people come and reserve the rooms. There are not as many tourists as before and more than ten new hotel projects in the pipeline have stopped construction due to poor market conditions.”
He added that the hotel room occupancy was returning to normal last September but the recent university protests caused many local and international tourists not to visit the city.
“As we all know hotels employ many people, but if we don’t have long lasting peace in our area, it is hard for the hotels to earn money’’ he said.
Bahir Dar is a major conference site in Ethiopia, it ranks fourth next to Addis Ababa, Adama and Hawassa. Tourists who come to see Lake Tana, Lalibella, Tis Abay and other monasteries and churches in Gojam, often book hotels in the city.
Last year the Addis Ababa Hotel Owners Association wrote a letter to the Prime Minister’s office and the Ministry of Culture and Tourism asking that all hotels in Addis be exempt from profit tax and loan interest this fiscal year. They argued that protests caused low occupancy rates and reduced income.
Addis Land audit far behind schedule
The Addis Ababa Land Holding Registration and Information Agency had plans to audit nearly 600,000 parcels in the city by 2022. However, in the last three years only 160,000 parcels have been audited.
Some of the reasons for the slow performance include poor coordination by the Land Management Document and Authentication Office, the Land Banking Compensation Payment Office and the Plan Office.
Out of the 20 Woredas in the city, the Bureau has audited 53,000 parcels. Land holding certificates have been given to individuals and entities but over 33,000 parcels are still undergoing disputes because of lack of information.
The Agency has 800 staff to complete the audit; however sources told Capital that this number should be doubled.
Currently giving out land holding certificates takes more than one year. The goal was for this to take two weeks. Auditing one district has taken more than eight months, the goal is for this to be accomplished in less than three months.
“Apart from the poor coordination of the work, we don’t have the necessary labor and beyond that there is high turnover of the staff due to the low salary. The city administration has studied a new strategy to retain workers, however nothing has been applied so far,” a source said.
“We have less than four years to audit the entire Addis Ababa region, and to retake land that is occupied illegally, but with the way things are going it could take over 10 years. So far we have only covered 20 of the 117 Woredas of the city,” a source said.
During the current land auditing, the Agency set a tolerance limit from three up to 14 percent for the land between 250 square meters and 3,500 square meters. If the person holds more land than the tolerance limit the administration will take the land and use it for lease auctions or other development work.
The pervious proclamation of the city stated that all land that is held after May 2005 will be dealt with in the new land lease policy.
The growing population and limited land supply has challenged the land market in Addis which recently fetched up from 10,000 up to 350,000 birr for the purchase of one square meter of land.
The City Administration of Addis Ababa is concerned about the development of an adequate drainage system, the renovation of slum areas, and the construction of modern roads and infrastructure. For this reason, the land board favors projects which promote social service investment or have welfare benefits, such as those in health and education.
At present, acquiring land is an arduous process and lease prices, particularly within Addis Ababa, are expensive. Government officials respond that the price is set by auction and investors are welcome, even encouraged, to set up their project outside the capital. This has only led investors to shop around for land just outside the Addis regional administration.
