The 2018 Ethiopian Knock-out championship round one brings together Premier League defending champion Saint George in a head on clash against Cup holders Wolayta Dicha while last year’s finalist Mekelakya entertains Diredawa.
Unlike many footballing nations that leave the format open for every club including amateur ones to take part, notorious for its incompetency and disorganization, the Ethiopian Football Federation opted for a championship comprised of only the 16 Premier League sides. Although the Federation blamed the clubs for declining participation, critics believe the Federation could have obliged the clubs with some ultimatum had it been ready for the championship. “It was a halfhearted effort and the clubs’ knew that,” a critic remarked.
This time the championship is taking place at different venues and Addis Ababa will host four of the eight showdowns. The other four matches are to be held in Gondor, Hawassa, Mekele and Jimma.
Seventh in the league table Ethiopia Bunna entertains 9th place Woldya in Addis Ababa while bottom of the table Arbaminch travels to Mekele to face Welwalo-Adigrat. The fixtures’ biggest clash is between current league leaders Dedebit FC and second place Jimma AbaJIfar the face-off taking place in Jimma.
The dream of retaining the league title for a record four times coming in to danger, Saint George is expected to go for the knock out crown thus taking at home in high moral ground Wolayta Dicha. Round one’s biggest derby match takes place in Hawassa between the hosts and Sidama Bunna while relegation struggler Ethio-Electric entertains third in the table Mekele.
Saint George faces Dicha in knockout round one fixture
Temesgen Dana head coach to U-17; Atnafu to U-20 national side
In a hard to believe move from the Ethiopian Football Federation, Hawassa Youth Coach Temesgen Dana was appointed national U-17 new boss while Atnafu Abate was promoted to takeover U-20 National side.
What makes the summon unusual is EFF’s break of the tradition of appointing home grown coaches that usually use Addis Ababa Stadium as their second address. The new boss is from the South who steered the Hawassa U-17 side to a double championship trophy in 2016 followed by a U-20 championship trophy last season. “He rather deserves the U-20 position considering his latest achievement. Nevertheless it is good that they gave him the chance,” fellow youth team coach Dawit suggested. With the latest format of the qualification matches among zonal nations, Ethiopia has a good chance of returning back to the stage after two decades.
Coming ahead of former U-17 and Jimma AbaBuna coach Girma H/Yohannes in the selection process AtnafuAlemu took over the U-20 hot seat along with Adamu Numero the goal keeping coach. Despite complaints from a number of youth team coaches, the federation stood firm on its stand of appointing Atnafu to go ahead with the responsibility of preparing the squad for the preliminary qualification round showdown against Burundi in two weeks. “The chance should have gone to a coach dedicated to Youth Football who works on a U-20 team. Otherwise how can those coaches be inspired to waste their precious time over youth football,” suggested Dawit on Zami FM.
Coffee colonizers Swiss conglomerate’s move to grow ‘Ethiopian flavored’ coffee in Brazil alarming wakeup call
The Ethiopian Coffee and Tea Development and Marketing Authority (ECTDMA) said it would evaluate the move of global food processing giant, Nestle SA, after they announced plans to cultivate an Ethiopian flavored coffee.
Sani Redi, Director General of ECTDMA, said he saw the news published by Bloomberg on March 8 reporting that Nestle planned to cultivate Ethiopian coffee in Brazil. “This is alarming for our product,” he said.
However, Hailu Gebrehiwot, 85, head of Haicof Limited Plc, a coffee exporting company with over half a century of experience, sees Nestle’s move as a good opportunity for Ethiopia, which he feels is not doing enough to fully exploit the natural advantages Ethiopia has when it comes to coffee.
“We have to expand and identify the taste and flavor of our coffee beans produced throughout the country,” he said.
Hailu said Ethiopian coffee varieties were once collected by a special committee of FAO in 1965 because they were afraid some varieties would become extinct.
Nestle SA was quoted in the Bloomberg article as saying it had acquired the rights in Brazil to produce ‘Ethiopian coffee’ which replicates the taste of Ethiopian beans.
In 2015 the company moved to Brazil as the first Dolce Gusto capsule producer, a product launched in the mid 2000s by Nestle, to reach the Latin American market. Dolce Gusto is a coffee capsule system from Nestlé. The machines are produced by hardware manufacturers.
The report indicated that there are 21 types of pods in total, including some that contain tea, but the factory only manufactures 13. Pedro Feliu, Head of Coffee at Nestle Brazil, says the company aims to make the full range on-site and to reach this goal Nestle needs a specific Ethiopian coffee flavor. The Bloomberg report explained that buying roasted Ethiopian coffee means higher costs.
“To find a solution, the Swiss company has obtained authorization from the Brazilian government to test, on a non-commercial scale, three varieties of beans developed at its research center in southern France that it hopes will replicate the qualities of Ethiopian Arabica,” the news report said. However the article does not mention exactly where the research center in France is and which Ethiopian Arabica coffee is being tested.
“Brazil took coffee Arabica from Ethiopia about a century ago, we are the true source of coffee Arabica, the climate we have here makes the flavor and aroma,” Sani told Capital.
“Our experts are evaluating the issue to gauge reaction and to understand how this can be correlated with right of ownership of Ethiopia for the Ethiopian flavor,” Sani added.
Nestle is a major buyer of Ethiopian coffee. “This is the reason we are looking at its operation. We may call the company for further clarification and try to come up with a common understanding. We also will look how this affects our country,” he added.
“We are a source of coffee with many varieties and aromasbut, we have not conducted further development and research on what we have, meanwhile countries like Brazil have been vigorously supporting their coffee businesses,” Hailu, who has worked in the coffee profession for 60 years, said.
“The latest announcement will wake us up and motivate us to work harder than ever on developing and promoting Ethiopian coffee,” Hailu added.
“Initially our priority was to understand the situation and make a plan of action,” Sani said. “We may use other partners including international organizations to decide what to do,” he explained.
Legal experts say that the country has to obtain flavor patent rights, which is common in other parts of the world. “Companies and countries often obtain rights to their products, for instance they may buy the flavor rights for a given ice cream of a company,” one lawyer said.
“The common practice is for example, if Nestle produces a coffee by the name ‘Ethiopian Flavor’ but if the company says the product is Ethiopian coffee produced in another place it would be controversial,” Daniel Getnet, an active legal consultant for FDIs at Dabe Investment Consultant and Conveyance Plc, told Capital. He further said that the government has to have more knowledge about what the company is really doing for it to understand what the best course of action to take.
“We have a special opportunity because we can compete with quality as well as volume,” Sani said.
Data indicates that Ethiopia has only a six percent share of the global coffee market.
The news article stated that the company is testing the Ethiopian coffee flavor at its research center and already has come up with three varieties although it is yet to be determined if their product actually has the same taste as Ethiopian coffee, according to Hailu, who identified a Yirgacheffe coffee bean for the first time in 1960.
Before 1960 the coffee products from Yirgachefee were shipped under the brand Sidama Coffee, but because Hailu understood the coffee beans from the Yirgachefee area are different in texture and taste he was able to market them and obtain a better price for them on the international market.
“We have to undertake adequate research and study the coffee sector since we have a very favorable climate for the bean compared to other countries. The taste and flavor depends largely on the location, environment, and soil and in this regard we have many locations which produce unique tastes that still need further study,” he said.
Brazil has about 50 coffee research centers, but in the past couple of decades the coffee business in Ethiopia has suffered from lack of improved seeds or extension work.
Hailu thinks what Nestle is doing won’t impact Ethiopia’s coffee business very much.
“They may produce a very small volume so we need to focus on making our own product better,” he said.
However some say the move by Nestle is a matter Ethiopian identity and could cause the nation to suffer a market loss.
“It may take time for Nestle to develop the product, but it is alarming for Ethiopia,” he said.
They fear Ethiopia may lose its rights to its coffee flavor. They recalled the teff issue in which a Holland company holds the rights to teff, despite the fact that it was previously only known and produced in Ethiopia and is a staple food for most Ethiopians.
“Nestle may hold the flavor rights for three undefined Ethiopian coffee flavors,” an expert said. “We have to work to register the flavor and product rights,” they added.
“We have various varieties, aromas and high quality coffee throughout the country. As the owner, now we are in the process of classifying the beans by their variety and taste in collaboration with different organizations including the Ethiopian Biodiversity Institute, which has engaged in similar activity in the past,” Sani said.
He added that currently the patent registration for the Lekemt Coffee Bean is in process. The country also has the rights to Harar, Sidama and Yirgachefee coffee, and Ethiopia is the source for a wide variety of other flavors and aromas.
According to the report the Nestle’s beans have been planted in an undisclosed location. Pedro Malta, agricultural manager at Nestle Brazil, told Bloomberg that one of the varieties will be harvested for the first time this year and the other two in 2019.
“At least three more harvests after that will be needed to ensure quality before the company considers whether it should seek government approval so local farmers can grow them commercially,” he said.
Heavy industries ask for debt, interest relief as forex crisis continues
Private companies working in heavy industry and other major investments are asking the government to consider facilitating interest relief and settling debt extensions for loans they previously took.
Heavy industry investors that Capital contacted stated that for the last year they have not been able to obtain hard currency to import raw materials and spare parts for their operations which has negatively affected their production.
An investor, who on conditions of anonymity, said his company has over 2,000 employees, but their production is not as good as in the past and they have not been able to get foreign currency to import material to produce one of the major materials for the development projects in the country.
Experts in the heavy industry sector claim that the scarcity of hard currency has forced the prices of some products to skyrocket.
“If you see the steel industry, which is one of the fastest growing sector by adding some local and FDI investors, is suffering from lack of foreign currency,” an expert on the steel industry said.
The sector demands significant amount of hard currency to import a portion of billet but it has never secured LC in the past year, according to a sector expert. This causes the sector actors to limit their operation.
Recently it has been reported that the pharmaceutical sector is suffering from a hard currency shortage. This indicates the country is in a severe hard currency crunch, according to experts.
“Such kind of light industry is not expected to lose hard currency,” an expert in the pharmaceutical sector said. He argued that the pharmaceutical industry would be satisfied with a few million USD and didn’t require more than USD 30 million.
“But the manufacturers are claiming that they are suffering from the hard currency,” he said. He added that it shows that how the country is suffering from a lack of hard currency that does not even cover the demand of light but crucial areas.
For the heavy industries that experts estimated for over 150 companies the hard currency demand would be in hundreds millions of dollars. “If you look for the major steel industry there may be 40 companies, but their hard currency demand for a single year would be in billions of dollars,
“This would not be sufficient for the factories to operate in full capacity,” an expert on the steel industry who wanted anonymity told Capital.
The expert claimed that most of the steel industry is running at one third of its capacity, but recently its actual production has been significantly smashed.
The private sector also argued that even though they borrowed a huge amount of money to expand their business and manage the day to day operation the current political instability particularly in
Oromia region, which is the major destination, particular the surrounding of Addis Ababa, for heavy industries in the country has been affected in addition to the problems they are having obtaining inputs.
In the last two years frequent boycotts and unrest has been observed in the region which they say has affected their production. “We have also observed the problem in the factory compounds,” the private sector actors engaged in heavy industry said. They claimed that they manage more than 1,000 employees, while some of them have up to 3,000 workers.
“The shortage of hard currency and the unrest has affected our revenue,” the private sector actors claimed.
They are concerned with the burden of debt. “Most of every heavy industry investment has borrowed a significant amount of money for their operation,” an expert said. “It can be seen that a single company borrows hundreds of millions of birr from banks,” the expert added.
The current business slowdown has affected the debt settlement schedule for the companies, according to sources in the industry.
They want the government to reschedule the payment of their credit, otherwise it will backfire on the sector and the country’s economy, since they have a huge amount of capital and work force.
“We do not have the revenue we expected and this has directly affected our cash flow so we are unable to pay back our credit,” a heavy industry actor said.
“If the company does not have raw material it is clear that it does not have work,” a factory owner said.
Peace is the country’s priority, while the rest is secondary but currently the question is that the youth and educated groups are looking for work that must be filled by the private sector, according to experts. The hard currency shortage is the challenge for the sector experts said. “The past one year is a challenging time for the private sector. At least the interest rate on loans should be minimized,” an industry actor said.
“Companies secured loans and deposited the money to banks until they can get hard currency, but we are paying interest for the loans for one year without using the finance,” he said.
He insisted that the government get involved in the issue to find a solution at least to minimize the interest rate, which is currently over 19 percent on private and over 10 percent on the two state owned banks.
Ethiopia has been expanding its manufacturing industry that it wants to make it the major source of the economy. According to the government policy, the heavy industry is one of the major areas that the government plans to boost in the current Growth and Transformation Plan (GTP II).
Tadesse Haile, Special Advisor to the Prime Minister in the industry sector, told Capital that the issue has to be answered by National Bank of Ethiopia (NBE).
He said that the central bank and other private and public financial institutions are appropriate bodies to handle the case.
“The hard currency shortage is a real effect in the country, but it is natural since our development demands huge amount of foreign currency,” Tadesse said.
Most of the developmental projects are demanding hard currency, which is the major source of finance for projects since most of the inputs are imported, according to the PM advisor.
Tadesse, who mainly follows the textile and leather sector, said that the textile and leather are also sources of hard currency generation and has to get foreign currency since they generate it.
“We are supporting these sectors to get priority from the financial institutions, while sometimes they face challenges in terms of accessing LC,” he added.
He said that the textile and leather sector hard currency demands are not considered very small. However they are not equal with the demand of heavy industries like the steel industry.
Most of the inputs for the textile and leather sector are on imported items, for instance the garment sector is still mainly using import fabrics and cotton is also imported like accessories, according to Haile.
He said that the steel sector is one of the major areas that support the country’s developmental projects. But he preferred to refrain from speaking further about the sector as he said there are others following it.
The manufacturing sector will grow by 24 percent in the coming years of GTP II, while total industrial sector development is targeted to register an 18 percent growth.
The manufacturing sector has grown by 8 percent in the past five years of the GTP I, according to the National Bank of Ethiopia (NBE). Based on the current plan, it is expected to register a threefold increase. The industrial sector share will also reach 23 percent of the GDP by 2020.
The manufacturing sector is one of the basic pillars of the economic restructuring. In the final year of the five year plan, the sector is expected to generate USD four billion from manufacturing exports.
While exports from the manufacturing sector currently accounts for only 10 percent of the total exports, it is expected to make up 25 of the total share of hard currency earnings in GTP II. Manufacturing will rise to 40 percent of total export earnings by 2025.
