The Ministry of Agriculture and Natural Resources is developing a regulation to allow seed producers to export their products, Capital learned.
Experts said the new rule would allow the country to export more fruits and vegetables. Currently companies are allowed to grow seeds but not allowed to export them.
“The case was very complicated. The government preferred preventing seed exports because they thought giant international seed producers and sellers did not want to follow the procedures like tracing seed identity,” an expert who preferred anonymity told Capital.
They went on to say that currently big international seed producers are exporting on a trial basis but they declined to mention names.
According to the new information that Capital obtained the government is now interested in opening up the fruit and vegetable sector to expand seed production. This would make them more accessible locally and easier to export.
“There was not a specific regulation about the export of seeds,” Tewodros Zewdie, Executive Director of the Ethiopian Horticulture Producer and Exporters Association (EHPEA) said.
The regulation supporting the growing demand of giant seed producers is in the process of being created and it is expected to be applicable in the current budget year.
The country ratified, Seed Proclamation no. 206, in 2000, but it was not supported by further regulations or directives. However, article 35 sub article 1 stated: The Council of Ministers may issue regulations necessary for the implementation of this proclamation and sub article 2 added that the agency that oversees fruits and vegetables should issue the directive.
Meanwhile the country has not allowed seed production for export, small seed growers that are very small and engage in very few products are allowed to supply their product for the local market.
Gebremichael Habte, agronomist and consultant in agri-investment, told Capital that the upcoming regulation would be a good opportunity for the country to generate more hard currency. He said that it would also create more jobs and save hard currency that goes to importing seeds.
“Seeds are expensive when they are imported,” Gebremichael said.
Experts said that this should help the country produce more fruits and vegetables.
“The new law may allow the large scale industry players and household farmers to obtain seeds cheaply and get a wider amount of varieties,” experts said.
“Currently the fruit and vegetable sector is not growing as expected and lack of seeds in one reason,” Tewodros said.
According to Tewodros, fruits and vegetables have not succeeded as well as horticulture has.
“Quality seeds for vegetables and fruits are not easily available, international seed producers were not engaged in the country,” he told Capital.
It is good news that the government is now developing a regulation to allow the international seed growers to produce the product locally. He said that several promotional activities have been conducted to attract potential seed producers to Ethiopia.
Several companies have already expressed an interest in investing in fruits and vegetables, according to experts.
This is a good time to invest in fruits and vegetables because the global diet trend is changing as more people are turning away from meat and the world’s population is increasing.
Tewodros mentioned that agro logistical issues like container shortages and shipping are another challenge when it comes to exporting more fruits and vegetables.
“In the coming years we would like to see better conditions,” he said.
International chain supermarkets are looking into Ethiopian fruits and vegetables.
If the policy, infrastructure and rules of the government become easier experts say produce production would increase.
Recently strawberries have been exported. In the past few years the number of strawberry farms has increased to 15 from two about three years ago. They are also exporting to Europe.
A report indicated that fruits and vegetables have a lot of potential, the Association head said.
Data indicated that the country has spent a significant amount of hard currency to import seeds and the amount is growing rapidly. For instance in 2012 Ethiopia imported 127.9 tons of vegetables with a total value of USD 3.3 million and that amount has increased to 553 tons with value of USD 15.1 million in 2016.
Capital’s effort to get further information from Ministry of Agriculture and Natural Resources was unfruitful.
Seed exports to be allowed in hopes of attracting international investors
Intrade UK to open textile factory in Ethiopia
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.
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.
