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Volume 15 No. 767, SUNDAY, January 11, 2015
Content Matters
f i v e ( 5 ) b i r r o n ly
Development Bank Lets Two VPs Out, Elevates New
„„ One of the former VPs looks to take a position in a different bank with a different routine
he state-owned financier,
Development Bank of Ethiopia
(DBE), changed its two vice
presidents effective January 1, 2015
after it has got the approval from the
National Bank of Ethiopia (NBE).
Teka Yibrah replaced Genene Ruga,
vice president of corporate services,
while Girma Worke, vice president
of support services, was replaced by
Dereje Awgechew.
Girma, who had served the Bank
for the past 25 years, submitted his
letter of resignation to the board of
the Bank on November 24, 2014.
Four days after Girma’s resignation
request, Genene who had served
the Bank for the past 28 years
submitted his resignation request.
Both resignation requests got the
acceptance from the board on the
same date of submissions.
5.5b Br
President of the Bank, Essayas Bahre,
selected Dereje and Teka as a new vice
Total Financing DBE
disbursed as of June, 2014.
Photos by: Kalkidan Mihretu
Smiles of Success
PRDF heavyweights, Bereket Simon, centre, policy advisor
to Prime Minister Hailemariam Desalegn and board
chairman of the Commercial Bank of Ethiopia (CBE),
the largest capitalised bank in Ethiopia; Abay Tsehaye,
right, Berket’s colleague in advising Hailemariam and member
of the board of CBE; and Ahmed Abetew, minister of Industry
(MoI); are seen sharing sincere smiles on CBE’s Exporters &
Money Transfer Agents Day, celebrated at Sheraton Addis on
Thursday, January 8, 2013. The cause of the smiles is CBE’s
close alliance with exporters and money transfer agents that led
to an exceptional performance in 2013/14 fiscal year. Reports
presidents and sent the suggestions to
the board of directors for confirmation
before it was sent to the central bank
for approval, according to Tadesse
Hatiya, vice president of Credit Services
at the Bank.
Girma, the former vice president,
(Continued on PAGE 4)
Eth Switch
Inches to Pick
ATM Card
Printing System
show that the Bank managed to earn 5.5 billion dollars in foreign
exchange in the fiscal year. In the event organised to recognise
outstanding exporters and money transfer agents, MIDROC Gold,
represented by chief executive officer, Arega Yirdaw (PhD), close
right, and Western Union got awarded with the highest prizes
for their 100 million dollars earnings and 400 million dollars
transfer, respectively. The event also recognised five platinum,
10 gold, 26 bronze and 114 certificate awardees. Indeed, there
seems to be enough in the books of the privileged Bank, which
commands 902 branches and 9.9 million account holders, for
the heavyweight guardians of CBE to be happy about.
„„ The two local bidders
made offers nine million
Birr apart
Eth Switch S.C is considering financial
offers from two different companies
that are nine million Birr apart for
the supply and installation of the
same ATM card printers with different
Four IT vendors had responded
to the initial tender floated by Eth
Switch on November 9, 2014 for the
supply, implementation, and technical
support of card personalisation
machine. The four companies were
the aforementioned two, including
SS Communication (SSC) and Boston
Plc. A financial opening for the four
companies was held on November 20,
2014. On December 22, 2014, the
Company sent a letter to the two IT
vendors, Tewaru and Moti, stating that
they are shortlisted so that they should
submit their financial proposals again
for the specific brands of S7000
and S6000. S7000 has a capacity of
making 1,200 cards per hour and
S6000 makes 600 cards in hour.
(Continued on PAGE 4)
Electoral Board to Approve Funds for Parties Election Campaigns
The support to be granted to political parties for the purpose of election is going to be approved in a week’s time, according to
Demis Benti, head of public relations at the National Electoral Board of Ethiopia (NEBE), despite criticisms by opposition parties.
The Electoral Board held talks with 60 political parties - of which 22 are nationwide political parties – on January 2, 2015, at the
Ghion Hotel, on the allocation of funds for the upcoming general election. The board had presented its proposed plan, which it
said was based on the experiences of other countries, for the allocation of the support. PLEASE SEE THE FULL STORY ON PAGE 5.
Other Income (2012/13)
Dashen (796.1m Br)
BoA (281m Br)
Nib (280.7m Br)
United Bank (304.3m Br)
AIB (529.5m Br)
LIB (128.1m Br)
BIB (71.6m Br)
Fortune is a weekly business newspaper published and distributed by Independent News & Media Plc. Tel: 251-011 416 30 20. Fax: 251-11-416 30 39. P. O. Box: 259, Code 1110. Price: 5.00 Br, Djibouti 400 FD, Somaliland 3,000 SL.
Content Matters
Established in May 2000.
Volume 15, Number 767
Sunday, Jan. 11, 2015
Fortune is a weekly business
newspaper published and distributed
by Independent News & Media Plc.
Fortune is a registered newspaper
with the Ministry of Trade and Industry
under Licence Number 667/98.
Independent News & Media Plc is
registered by the Ministry of Trade
and Industry under Registration
Managing Editor
Tamrat G. Giorgis
[email protected]
There could be no democratic election without democratic processes.
The structure and management of election processes is very important
to define the legitimacy of the government to come to power in the end.
Focusing on election results is not unique to the Ethiopian political
space. Weak institutions, undeveloped democratic culture and societal
divisions are favourable factors to a political culture that weighs results
more than processes. In the Ethiopian case, this is furthered with the
presence of over 80 political parties.
While 55pc of Africa’s population is engaged in agricultural
livelihoods, only approximately one percent of bank lending across
the continent goes to the agricultural sector. In sub-Saharan
Africa, 38pc of adults living in cities report having a formal bank
account, compared with only 21pc of adults living in rural areas.
Smallholder farmers represent two tremendous opportunities: a
market opportunity for any financial institution looking to grow
client base and an impact opportunity for all financial institutions
having a social mission.
Page 26
Opposition Parties go Ahead Despite
Complaint Over Observers’ Election
As the registration of electorate for the upcoming fifth national election has began opposing
political parties are raising their concern over the process of the election while the incumbent
party arguing in contrary, report DAWIT ENDESHAW, FORTUNE STAFF WRITER.
Yonathan Abebe
[email protected]
Woreda 06, House Number 795/367
Deputy Managing Editor
Hailu Wondimu
[email protected]
OP-ED Editor
Getachew T. Alemu
[email protected]
Fasika Tadesse
[email protected]
[email protected]
Dawit Endeshaw
[email protected]
Photo by: Samuel Habtab
Senior Photographer
Kalkidan Mihretu
[email protected]
Samuel Habtab
[email protected]
Girma Feyissa
[email protected]
Henok Demessie
[email protected]
Graphic Designers
Ashenafi Chekol
[email protected]
Sofoniyas Tadesse
[email protected]
Exclusive Advertising Agent
Commercial Information Agency Plc
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Tel: 251-11-416-3020
0911448026 / 0930012385 /
Fax: 251-11-416-3039 PO Box: 259,
Code 1110
Addis Abeba, Ethiopia Sierra Leone
Street (Debre Zeit Road) Next to
Global Hotel, Kirkos District, Kebele
03 House No. 542 Tegene Building,
7th Floor.
Email: [email protected]
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Almaz Webie a registrar at election station located in Woreda 7 of Arada District is setting beside public observers at the same time checking the electorate file
after she already registered 29th of its electorate.
s polling stations around
the country have opened for
registration of the electorate
on January 9, 2015, opposition
political parties are expressing their
discomfort on the pre-election process.
Teferi Mekuria is among 33 million
voters projected by the electorate board
for the upcoming election. Fortune met
with him while he was registering to vote
at his nearby polling station. He was the
29th voter registered at Woreda 7 of
Arada District at three o’clock on the
very first day. The station is among three
polling stations located at the former
Kebele 13/14 office. According to the
statement from Tsege Alemu, a registrar
at the station, they are responsible for
registering electorate at the specific
The support to be granted
to political parties for the
purpose of election is going
to be approved in a week’s
time, according to Demise
Benti, head of public
relations at the National
Electoral Board of Ethiopia
(NEBE), despite criticisms by
opposition parties.
The Electoral Board held
talks with 60 political
Page 5
Kebele and residents from house
number 001 to 299 and operates seven
days a week from 8:30 am to 5:30 pm.
Each polling station around the country
is structured in a way that each station
is only allowed to register a maximum
number of 1,000 electorates and the
arrangement has been made based on
this parameter.
According to the data obtained from
National Electoral Board of Ethiopia
(NEBE), the Board has allocated 44,454
polling stations, with 222,270 public
observers and 547 constituencies
with 1,935 election officials. As far
as regional distribution is concerned,
Oromia regional state has the largest
number of polling stations, public
observers and election officials with
Oromia is conducting a
study which could lead to
the establishment of an
autonomous body that
will be fully in charge of
industrial development
in the region, instead
of the Industry & Urban
Development Bureau
as is the case now. This
follows from Addis Abeba,
which set up the Industry
Development Bureau.
Page 9
political parties
are not happy
about the way
the pre-election
process is being
The government is
expecting to receive three
consignments of fertilizers,
each carrying 50,000ql
this January 2015, which
is part of the 900,000ql
the government purchased
with 431.9 million dollars
from five companies. The
five supplier companies
are Yara Switzerland Ltd,
Agri Commodities Group,
Witraco, Helm AG and
India Agro.
Page 11
15,501, 77,501 and 537, respectively.
At the other extreme, there is Harari,
with 140 polling stations, 700 public
observers and six election officials.
Whereas Addis Abeba has 1,523 polling
stations with 7,615 public observers,
and 69 election officials.
However, despite this preliminary
activity surrounding the election,
opposition political parties are not
happy about the way the pre-election
process is being conducted, contrary
to the argument by the incumbent party.
The ruling party argued that process
prior to the electorate registration, such
as election of both public observers
and election officials followed the right
procedures under the law. The election
was fair and free of any misconduct, said
Ethiopia’s trade flow, as
a function of both the
cost of using the ports
of other countries and
distance traveled, would
stifle any genuine policy
of economic development.
The huge fees paid out
annually for port services
are drains to the economy
of the country, which is a
net importer.
Page 23
View From Arada
We, Ethiopians, culturally
consider daring views
as offensive indulgences
and so prefer to keep in
secrete. At times, they
try to involve singers, or
“Azmaris”, as their trade
was known then, to make
indirect implications or
puns that are openly said
but meant to implicate or
slander others indirectly.
Page 31
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 3
Oil US $/bbl
Ethiopian Birr/US $
Photo by: Samuel Habtab
Desta Tesfaw, head of public relations
office of EPRDF. He denied allegations
by the opposition that the elected public
observers were affiliated with the EPRDF.
Forum for Democratic Dialogue in
Ethiopia, a.k.a. Medrek, is among
those that criticize the legitimacy as
well as the trustworthiness of NEBE,
the body responsible for regulating
and administrating all elections at the
national, regional and local levels.
The election of public observers was not
publicized to the public so that the public
could vote, said Merera Gudina (PhD),
head of external affairs of Medrek and
a lecturer at the department of Political
Science and International Relations
Addis Abeba University. His party was not
formally invited, he said, although there
was media announcement that parties
could observe the election process.
He emphasized that those elected
observers are directly allied with
the ruling party and there is nothing
improved by the board regarding the
process of the election. Rather, it is
becoming worse and the independence
and credibility of the board is within a
question mark.
“EPRDF is conspiring to act as both the
player and the referee of the game,”
added Merera.
The party, through its president Prof.
Beyene Petros (PhD), had called a press
conference to call for the repeat of the
election of the public observers last
week. Medrek is now preparing to select
Teferi Mekuria an electorate at Arada District, registering to participate for the upcoming fifth national election
at his constituency.
its candidates who run for the upcoming
Established in 2008, Medrek was the
only opposition political party that was
able to secure one seat in the Parliament
during the 2010 general election. The
party is a coalition of four opposition
political parties: the Oromo Federalist
Congress (OFC), Sidama Liberation
Movement (SLM), Union of Tigreans for
Democracy & Sovereignty a.k.a Arena
and the Southern Ethiopia People’s
A d v e r t i s e m en t S
Democratic Union.
Having the same discontent as Medrek,
Unity for Democracy and Justice (UDJ)
argued that the election of public
observers was not free and fair. In
addition, the party raised questions
on the financial capacity of the board
to facilitate the election saying donors
like the EU are not willing to support
the election.
The party specifically mentions elections
of public observers held in Northern
It is becoming
worse and the
independence and
credibility of the
board is within a
question mark.
Coffee (Arabica) $/kg
Shoa, Debere Sina as an example that
the members of EPRDF orchestrated
the election.
While claiming the pre-election process
have problems, UDJ seems to be busy
fixing internal problems. In relation to
this, the party is accusing NEBE, saying
the board is conspiring to push UDJ out
of the election battle.
This accusation came after the board
announcement that the election of UDJ
president held on October 12, 2014,
replacing Gizachew Shiferaw (Eng) by
Belay Fekadu, was illegal as it was against
the party’s bylaws and Revised Political
Parties’ Registration Proclamation.
The decision by the board has the
intention of removing the party from the
election, said Girma Seifu, during a press
brief held at the party’s headquarters
on January 9, 2015. He is the only
opposition party member who had a
seat at the parliament as a member
of Medrek. Girma is the current vice
president of UDJ. However, following this
announcement by the board, the party is
expected to conduct the re-election of
the president for today.
Having considered the interest of the
general public and taken the process
of democratization into consideration,
the board has decided to give UDJ a
second chance; and in accordance with
this, we expect the party to settle its
internal problem by January 12, 2015,
(Continued on PAGE 48)
P ag e 4
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
Eth Switch Inches to . . .
It opened the financial proposal of the
two companies on Monday January 6,
2014, and will announce the winner in
“a very short period of time,” according
to a member of the bid committee who
declined to give further information on
the issue stating that the offers from the
two companies are under evaluation.
Tewaru Trading made the lower offers
of 9.4 million Br for the Matica S6000
and 14 million Br for the Matica S7000,
significantly lower than Moti Engineering’s
12.1 million Br and 18.9 million Br,
While both models are products of Matica
Technologies AG, Tewaru proposes to
supply the software from Giesecke &
Devrient (G&D), a German company, and
Moti from from Gemalto, a Netherland
Eth Switch was established in 2011 by all
of the 16 banks in Ethiopia at the time,
based on a June 2009 recommendation
by the central bank. The switch system
enables the Banks to transfer funds
electronically, clear checks between
themselves and share each other’s
automated teller machines (ATMs) and
Point of Sale (PoS) as well as receive
and give money through mobile bank
payments and internet banking.
The forming of Eth Switch is part of
the National Bank of Ethiopia (NBE’s)
National Payment Strategy. It requires that
all banks use centralized online real-time
& electronic (CORE) banking solutions,
which interface with the Central Bank and
clear settlements between them, without
the necessity of any physical presence.
The strategy has three parts.
The forming of Eth
Switch is part of
the National Bank
of Ethiopia (NBE’s)
National Payment
The National Bank of Ethiopia (NBE)
launched the Ethiopian automated
transfer system (EATS) in May 2011,
to implement this system. Within EATS,
there is the Real Time Gross Settlement
(RTGS), for low volume high value
transactions, and the Automated Clearing
House (ACH), for high volume low value
transactions. The National Switch is the
third part of this strategy, after RTGS
and ACH.
Every bank in Ethiopia is a shareholder in
Eth Switch. The company has a capital of
80.5 million Br, and each member bank
(Cont'd from PAGE 1)
has 5,030 shares. Presidents of banks
must have a share each and newly formed
banks must join in by buying a share at
1,000 Br. It has procured an Electronic
Transfer System from Swiss-based BPC
Banking Technologies in March 2014
after a two-year bidding process. The
system it has procured is National
Electronic Funds Transfer (NEFT) Switch
Clearing, Settlement and Reconciliation
A new comer to the business, Tewaru
was established back in 2010 by two
shareholders as vehicle spare parts
Development Bank Lets . . .
has a BA Degree in accounting from
Asmara University and obtained his
Master’s of Business Administration
from Greenwich University, England,
specialising in International Business.
He has worked in the DBE for the
aforementioned years, rising from junior
accountant to regional manager of DBE
at Hawassa. He had been serving as a vice
president of support services since 2007.
Genene has a BA Degree from Alemaya
(now Haromaya) University in agricultural
economics; he has a Master’s Degree in
Business Administration, specialising in
Finance Management from Indira Gandhi
National Open University (IGNOU). He
also has two post-graduate diplomas in
management and financial management.
He has been working in DBE for 28 years
rising from junior loan officer, branch
manager, and regional manager until
he became vice president of corporate
services seven years ago.
Genene is leaving to join another bank that
has a different working environment and
challenges, he told Fortune, while Girma
mentioned continuous stress and a heavy
work load as his main reasons for leaving
his post. He also wanted to take a break
for a while.
The new vice president of corporate
services, Teka, has a statistics degree from
Addis Ababa University (AAU) and a MA
in economics from Makerere University
in Uganda. He has spent 25 years in DBE
on the post of credit, loan, research and
corporate planning department.
Before he became vice president, Dereje
served the Bank for the past 24 years
rising from junior loan officer to loan
services director. He has a BA degree
from Haramaya University in agricultural
“We selected the new vice presidents as
they worked in the bank for the past many
years and they know the Bank well,” said
Genene is
leaving to
join another
bank that has
a different
importer and distributer but lately, the
company has transferred to importer and
supplier of computer accessories, while
Moti established in same year with Tewaru
as Information and Communication
Technology solutions provider. So far
Moti supplied 910 ATM machines for
several private banks and also for the
state owned Commercial Bank of Ethiopia
The S6000 is used for printing of Smart
Access Cards, Credit and Debit Cards, Gift
and Loyalty Cards, Membership Cards,
Benefits Cards. The S7000 is used for
Credit and Debit Cards, Gift and Loyalty
Cards, Secure Photo IDs, National IDs,
and Membership and Benefit Cards.
(Cont'd from PAGE 1)
Established back in 1909 and with the
current structure implemented in 2003,
DBE has a structure with one president
and four vice presidents under him
who oversee corporate services, branch
operation services, credit services and
support services.
As of June 2014, the Bank has disbursed
a 5.5 billion Br financing, while it has
approved a 7.4 billion Br loan. It has also
collected three billion Br during the last
fiscal year where the outstanding amount
was 22.5 billion Br and is able to get 527
million Br profit after tax.
Corporate services includes
communication, promotion, human
resources and planning while supportive
services includes finance, Information
Technology (IT), project management,
fund management, research department
and property management.
A d v e r t i s e m en t
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
Electoral Board to Approve Funds
for Parties Election Campaigns
opposition criticized formula as beneficiary to EPRDF
he support to be granted
to political parties for
the purpose of election
is going to be approved
in a week’s time, according to
Demise Benti, head of public
relations at the National Electoral
Board of Ethiopia (NEBE), despite
criticisms by opposition parties.
The Electoral Board held talks
with 60 political parties - of which
22 are nationwide political parties
– on January 2, 2015 at the Ghion
Hotel on the allocation of funds for
the upcoming general election.
The board had presented its
proposed plan, which it said was
based on the experiences of other
countries, for the allocation of
the support. The proposed plan
will use three main requirements
for the support, these include
the number of seats in federal
or state houses, the number of
candidates nominated by the
political parties and the number
of women candidates nominated
by the political parties, according
to Demise.
Out of the total budget, 55pc will
be given based on the number of
seats in federal and state houses,
25pc on the number of candidates
nominated by the political parties,
10pc will be allocated based on
the number of women candidates
nominated by the political parties
and the rest will be distributed on
the basis of equality, according to
The requirement that is based
on number of women candidates
nominated by the political
parties is a great element that
can be appreciated to support
the participation of women in
politics, stated Getaneh Balcha,
research and strategy officer of
Semayawi party.
On the other hand, the rest of the
requirements had raised criticism.
The plan is unfair and does not
seem to consider the current
Ethiopian political arena, which is
dominated by one party, according
to Tilahun Endeshaw, head of
public relations of MEDREK.
Especially to use the number
of seats won in the preceding
general election, which is already
a done deal, as a criterion is
unnecessary as what lies ahead is
a new election, he added. This idea
The plan is unfair
and does not seem
to consider the
current Ethiopian
political arena
A d v e r t i s e m en t S
is shared by Semayawi party, which
was represented by Getaneh.
“The method will only serve the
incumbent government, which
has won almost all seats in the
previous general election,” stated
Getaneh stormed out of the meeting
after he tried to express his party’s
dissatisfaction on the general
aspect of the NEBE procedures
and conducts, which it believes are
unjust and undemocratic.
In the 2010 general election,which
was held for 547 seats in the
House of Peoples’ Representatives
in 547 Constituencies, 61
parties had participated. The
Ethiopian Peoples’ Revolutionary
Democratic Front (EPRDF) won
499 seats; where as the remaining
48 seats were filled by other
parties including one seat by
Forum for Democratic Dialogue
in Ethiopia (Medrek). It won
the single seat representing an
electoral district in Addis Ababa.
The government grants support to
political parties to be utilized for
the election purpose for federal or
state houses and for conducting
their day-to-day activities,
according to the Directives
Concerning the Procedure to
Determine the Apportionment
Financial Support to Political
Parties No. 5/2009. The support
to be granted may be in the form
of money, in kind and in service.
P ag e 5
As the registration of electorate has already begun on January
9, 2014, Unity for Democracy and Justice (UDJ) a.k.a Andinet, is
expected to elect its president for the second time today January
11, 2015.
This decision was made by the party after National Electorate
Board of Ethiopia (NEBE) gave a deadline to fix its internal problem
by January 12, 2015.
According to the board the previous election of the president of
the party, Belay Fekadu, (left) held three months ago, was not
elected in line with the party’s bylaw and the revised political
parties’ registration proclamation, which the election was not held with the consent
of the majority of the general assembly of the party.
The party claims that the decision by the board was politically motivated, targeted on
the party’s credibility, according to a press briefing held at the party’s headquarter
on Queen Elizabeth Street by the officials of the party last Friday, January 9, 2015. ■
Read Less: Know More
UDJ to Re-elect President on Eve of Deadline
Ethiopia to Use Port Sudan for Agricultural Inputs
Ethiopian Maritime Affairs Authority (MAA) started negotiation with the
government of Sudan to use port of Sudan for the import of agricultural inputs
along with the Djibouti Port.
Delegates from the Ethiopian Shipping Lines and Logistics Enterprise (ESLSE),
Ministry of Agriculture (MoA), Agricultural Input Supply Enterprise (AISE) and
Ministry of Transport (MoTr) visited the port of Sudan for one week and returned
back to Ethiopia after they started the negotiation.
The MAA prepared a draft document for the deal and started negotiation with
the Sudanese to use the port along with the Djibouti port, according to a source
who is part of the delegation.
Ethiopia, a land-locked country, is using the Djibouti port to import agricultural
commodities including wheat and fertiliser. Ethiopian Grain Trade Enterprise
(EGTE) is importing four million quintals of wheat and Agricultural Input Supply
Enterprise (AISE) is importing 900,000ql of fertiliser for the current fiscal year
using Djibouti port. ■
P ag e -6
Holiday Gives Boost . . .
Vo l . 15 No. 767
J a n . 11, 2015
During holiday eves most people purchase
different kinds of liquors to present as a
gift to their relatives and to for household
consumption, related to this the supply of PAGE 10
different liquor markets is increasing, reports
suppliers and buyers more
Diaspora Investor Set Free in a Higher
Court Reversal of A Two-Year Sentence
Yonas, Akiko engaged in legal battle involving 50 million Br, computer access, extortion
Lideta federal high court has reversed the
cyber crime sentence previously passed
by a first instance court against Yonas
Kassahun, a diaspora with a German
citizenship who was alleged to have
committed the crime against Akiko, Orchid
business group owner.
The High Court reversed the lower court’s
decision, diverting the article, which was
applied to the case on hand from article
707(2) to article 706 of the criminal
code. By doing this, the court reduced the
rigorous imprisonment sentence of two
years into a simple imprisonment of six
months, thereby releasing the defendant
through suspension, noting that the crime
is governed by article 706 of accessing
computer system without authorization
not by article 707(2) because the Lower
Court was not provided enough evidence
to confirm that the data had been deleted,
an aggravating element under article
The High Court rejected the Lower Court’s
decision regarding the punishment
aggravating circumstance that the accused
was suspected of a previous crime of theft,
recalling the criminal law’s principle
that every suspect is presumed innocent
until proved guilty. However, it considers
mitigating circumstances that the accused
is a father of two and comes to invest in
Yonas was accused by a public prosecutor
based on article 707(2) (a) of the criminal
code, which provides less than five years
rigorous imprisonment and a fine not
exceeding 20,000 Br to anyone who,
without authorization accesses a computer
system and intentionally causes damage by
adding, altering or deleting data; executes
any scheme or wrongfully controls or
obtains money, property, computer services
or any data.
The prosecutor alleged that the accused
had accessed the victim’s email without
her consent through an unidentified system
and transferred business related data
found in her account to another account,
deleting the data from her account. He
was also attempting to extort 50,000,000
Yonas Kassahun
Akiko Seyum
Br from the victim in return for her data,
the prosecutor claimed.
As evidence, the public prosecutor had
presented oral and expert witnesses.
Akiko, the victim and other witnesses
had testified that the accused was trying
to extort 50,000,000 Br from Akiko in
exchange for the data he took from her
by accessing her email using Russian and
Germen technologies without her consent.
Documentary evidences were presented
from FDRE Information Network Security
Agency (INSA) that through unknown
methods, Yonas had sent the data from
Akiko’s email, [email protected], to a third
party’s email, [email protected] The
prosecutor had also presented ethio
telecom’s evidence that they were in contact
via phones at around the time the crime
was committed.
For his side, Yonas raised the defense that
being in a close business and intimate
Former International Program Director of Adoption Agency
Pleads Guilty to Ethiopian Adoption Fraud Scheme
he former International Program
Director of International Adoption
Guides Inc. (IAG), an adoption
agency, pleaded guilty last week
to conspiring with others to defraud the
United States by submitting fraudulent
documents to the State Department for
adoptions from Ethiopia and paying bribes
to foreign officials.
Assistant Attorney General Leslie R.
Caldwell of the Justice Department’s
Criminal Division and U.S. Attorney Bill
Nettles of the District of South Carolina
made the announcement.
James Harding, 55, of Atlanta, Georgia,
admitted as part of his guilty plea that,
between 2008 and 2009, he and his
co-conspirators submitted fraudulent
documents to the State Department to
facilitate adoptions of Ethiopian children
by U.S. parents. Harding admitted that,
in support of U.S. visa applications for
the Ethiopian children, he and others
submitted false documentation, including
contracts of adoption signed by orphanages
that could not properly give the children
up for adoption because, for example, the
child in question was never cared for or
never resided at the orphanage.
In entering his guilty plea, Harding
also admitted that he and others paid
bribes to two Ethiopian officials so
that those officials would help with the
fraudulent adoptions. Specifically, Harding
admitted that an audiologist and teacher
at a government school was given money
and other valuables in exchange for
non-public medical information and
social history information for potential
adoptees. Additionally, Harding and his
co-conspirators provided cash and allexpense paid travel to the head of a regional
ministry for women’s and children’s affairs
in exchange for his approval of IAG’s
Harding also applications for inter-country adoptions
admitted that and ignoring IAG’s failure to maintain a
he and others properly licensed adoption facility.
paid bribes to Harding pleaded guilty before Senior U.S.
two Ethiopian District Court Judge Sol Blatt Jr. of the
District of South Carolina, and a sentencing
hearing will be scheduled at a later date.
This ongoing investigation is being
conducted by the Bureau of Diplomatic
Security. The department appreciates the
assistance of the Office of Children’s Issues
at the U.S. Department of State. The case
is being prosecuted by Trial Attorney John
W. Borchert of the Criminal Division’s
Fraud Section and Assistant U.S. Attorney
Jamie Lea Schoen of the District of South
relationship with the victim, they had to
use an e-mail account jointly and that he
had obtained the victim’s consent to use
her e-mail. But when she denied payment
for the construction materials he rented
to her, he found out in her e-mail that she
was committing money laundry crime, he
alleged. He subsequently took the data to
another account he had opened and he
notified the Ministry of Justice about the
crime. A software engineering professional
testified that INSA’s evidence does not show
whether the password was taken by the
consent of the victim or not, rather the two
were exchanging data willingly.
Hearing the arguments and examining the
oral and documentary evidence, the Lower
Court passed a guilty verdict on the accused
based on article of 707(2) of the criminal
code. The Court noted in its verdict that
the elements in article 707(2), ‘without
authorization’ and ‘to obtain money’ are
fulfilled. Because Yonas’s confession that
he took the data, INSA’s testimony and the
testimonies that the accused was claiming
50,000,000 Br to hand back the data is
sufficient evidence showing the accused
had accessed the e-mail without the victim’s
consent with the intention of obtaining
money illegally. The court had rejected the
defense of the accused that he transferred
the data to disclose a crime, noting that
he had no right to investigate crimes but
to report them. In addition to that, the
accused did not prove whether the e-mail
was jointly used between the two, the court
Considering the public prosecutors’ claim
that there was aggravating circumstance
in Yonas’ suspicion of theft and guilt of
harassing witnesses, the Lower Court had
sentenced him to two years imprisonment
and a fine of 5,000 Br.
The Higher Court, however, argued that
the judges at the lower court had used
an aggravating article without reasonable
proof of the aggravating element, which
is deleting data from the computer of
the victim, Akiko. Accordingly, the court
decided to use Article 706, according to
which the defendant was given a sentence
of a simple imprisonment of six months
by suspension, resulting in the release
of Yonas.
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 7
P ag e 8
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 9
Oromia to Set up Independent Body for Industry
Oromia is conducting a study which could lead
to the establishment of an autonomous body that
will be fully in charge of industrial development
in the region, instead of the Industry & Urban
Development Bureau as is the case now.
This follows from Addis Abeba, which set up
the Industry Development Bureau in November
2014, taking it out of Trade and Industry Bureau.
This bureau, currently recruiting staff, could
open its doors in less than two weeks, Yohannes
Bekele, Industry Development Bureau head
officer, said.
The Ministry of Industry held a meeting with
small, medium and large enterprises on January
6,2015 at Ghion Hotel to discuss the challenges
and way forward to improve the industry sector.
In order to make a successful economic shift
from agriculture to industry, which is a core
element of the next GTP, this enterprise should
be given due attention, stated Mehbratu. The lack
of an autonomous body to deal with industry
was one of the major issues raised during the
“We are facing challenges in terms of finance,
land allocation and bureaucratic red tape, which
happen because a clearly
defined and specialized
body is not present,” stated
The lack
Birhane Esatu, one of the
participants from Oromia
of an
region representing Fraol
autonomous Metal & Wood Work small
body to
deal with
Oromia made the decision
in consultation with
was one of the Ministry of Industry
(MoI) to form a single
the major
responsible autonomous
body, according to Yasin
Mohammed, industry
service expert at the Oromia Industry & Urban
Development Bureau. The autonomy will help
deliver centralized and specialized support to
entrepreneurs, who are interested to invest in
the industry sector, he explained.
At present, the body responsible to the Oromia
regional industry sector, known as Industry &
Development Expansion Core-Process under, is
in the Design & Construction, department under
the Industry & Urban Development Bureau. It
was established to give strategic and procedural
support to the industry sector, but it failed to
deliver because of lack of commitment and
responsibility, Yasin said.
The Oromia Civil Service College is consulting
the Bureau on procedures to be followed
and elements to be included to study and
plan the structuring of the body. The study
started in December 2014 and completion
is expected in the coming three months. The
body will be established as an agency or bureau
or department, according to Yasin. If it is
established as an agency or a bureau, it will be
responsible for the regional government, but if it
is a department, it will still be under the regional
Industry & Urban Development Bureau having its
own department.
There are 218 small enterprises, 258 medium
enterprises and 158 large enterprises that are
private or public engaged in the manufacturing
sector in Oromia, according to Yasin. This figure
makes Oromia the second largest region in terms
of number of manufacturing companies next to
Addis Abeba, he added.
Other regions could follow in the footsteps of
Addis Abeba and Oromia, according to Mebrahtu
Meles, state minister for industry.
Photo by: Kalkidan Mihretu
Addis Abeba could open its industry development bureau in two weeks
Mehbratu Meles, state minister of industry (right), Tilahun Gemchu, domestic investment transformation directorate director at Ministry of
Industry (middle), and Aklilu Woldemarian, director, information & investment promotion directorate of Ethiopia Investment Commission (left)
leading the discussion held for the improvement of small, medium and large scale enterprise involvement in the industry sector of Ethiopia.
A d v e r t i s e m en t
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
F e a t u r e
Photo by: Samuel Habtab
P ag e 10
Getahun Diyasa, (right) a wholesaler from Addis Alem is purchasing 300 bottles of lemon and super mint flavored Areqe from Bale Zafe Alcohol & Liquor Factory located around Piazza on the Ras
Blacha street.
Holiday Gives Boost to Liquor Demand
During holiday eves, most people purchase different kinds of liquor to present as a gift to
their relatives and household consumption, related to this the supply of different liquor
markets is increasing, reports LUCY KASSA FORTUNE STAFF WRITER.
Photo by: Samuel Habtab
olidays mean selling 200
to 300 bottles of liquors
for Getahun Diyasa, who
runs a wholesale store in
Addis Alem Town in Oromia. The 55year old father of nine was in Addis
Abeba two weeks ago to buy liquor
from the Sebara Babur outlet of the
Balezaf Alcohol & Liquors Factory Plc.
He bought 300 bottles of lemon and
supermint flavoured liquors as well as
gin for 52 Br a bottle, the favourites
of his customers, which included
groceries (small liquor pubs) and bars.
On normal days, these same customers
bought 100 bottles a day.
It was not business people like him that
crowded the Balezaf’s outlet. Meheret
Gebreyesus, 70, prefers to drink beer,
she says, but she was there because of
the holiday.
“My favourite drink is beer, but I
wanted to buy areqie because it is a
habitual liquor in holidays and many
of my relatives who come to visit me
during the holiday prefer to drink it,’’
Meheret said.
She bought a bottle of Supermint and
Ouzo at 52 Br each.
Balezaf Alcohol & Liquor Factory Plc
produces 13 types of areqies, with
the major ones including Ouzo, Gin,
Supermint, Pineapple and aperitif. Out
of these types, all of the fruit types and
ouzo are highly demanded at holiday
times except Gin. Their price is 52 Br
per bottle if the buyers come with a
substitute bottle, or 67 Br, if they buy
the liquor with the bottle.
The general manger of the factory,
Belay Tekele, said that the Company has
prepared for additional supply by fixing
the previous raw material problems and
by expending the factory’s production
capacity, to meet the market demand
that the holidays normally create. The
production capacity of the factory is
40,000 bottles of liquor per day and
its sale rate increases at 30pc from the
normal day sale during holidays.
Wine and areqie are the preferred
liquor during the holiday due to their
lesser price than other liquors such
as whisky and vodka types. The most
common and major whiskey types
such as Black Label, Red Label and
White Horse are unaffordable by most
consumers due to their higher price.
Black Label was sold between 1,200Br
to 1,400Br a bottle. Whereas the
average price of Red Label and White
Label is 700 Br per bottle. Similarly,
the average price of vodka types
mainly Stolichnaya, Absolut and Winter
Palace is 400 Br, 550 Br and 700 Br,
Compared to whisky and vodka liquor,
local wines are easily affordable and
significantly lesser in price. The well
demanded domestic wine, Axumite,
is sold at 90 Br per bottle. Guder
and Awash are sold at 65 Br and 55
Br, respectively. The new addition
to local wines, Gerar and Rift Valley,
The holidays
also see
of such home
brews as tella,
korefe and tej
both made by Castel Winery, are sold
for 150 Br and 175 Br, respectively.
There is also Merry Scotch, a local
whiskey, which is sold with 200 Br a
bottle, which is also in high demand
because of its cheaper price, says,
Fetya Mohamed, a salesperson as Dati
Liquor, a distributer.
During holidays, liquor is highly
demanded by hotels, private persons
and companies for a gift. The importer
and distributer of different kinds of
liquor, Toskal Plc has been making prior
preparations a week before the holiday
by holding more supplies. It imported
the liquors from England, from the
Viyazo Company, for distributions to
bars, hotels and supermarkets.
Toskal plc sold 200 packs of 12 bottles
of whiskey each on normal days, but
that increases to 400 to 450 packs at
the holidays, with Black Label selling
more than the Red Label, unlike earlier
times, says the sales person who
declined to mention his name.
Similarly, smaller importers such as
Hussen Yassin importer and distributer
of liquor located around Bole, along
Cameroon Street, have confirmed that
the shops supply had increased for
the holiday though they do not want
to mention on what amount it has
increased and the number of bottles
the shop sold per day.
The holidays also see increasing
consumptions of such home brews as
tella, korefe and tej, of which only the
last is increasingly becoming more
available at commercial wholesale by
the brewers themselves.
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 11
Ethiopia’s Fertilizer to Arrive
in Batches Every Month
So far, seven consignments estimated to 350,000ql of fertilizer reached to the port Djibouti.
The government is expecting to receive three
consignments of fertilizers, each carrying
50,000ql this January, which is part of the
900,000ql the government purchased with 431.9
million dollars from five companies.
The five supplier companies are Yara Switzerland
Ltd, Agri Commodities Group, Witraco, Helm AG
and India Agro. The fertilizer started entering
the country by the beginning of November 2014
and seven consignments close to 350,000ql have
reached the port of Djibouti and have started
entering the country, according to Shiberu
Demisse, director of agricultural input marketing
at the Agricultural Input Supply Enterprise
The Enterprise announced a tender in August
2014 for the purchase of 521,000tn of NPS and
373,000tn of Urea. For the tender, a total of 11
companies have responded but only one of them,
Yara, made an offer for each of the two kinds of
fertilizers, while the remaining made an offer only
for one type of fertilizer. This is the second year
in a row that the Enterprise has bought NPS, a
replacement for DAP, which it dropped two years
ago. NPS has become favored over DAP because
it has everything DAP has and Sulfur, according
to Amarech Bekele, director of communication
at the Enterprise.
Yara will supply 571,000ql of fertilizers, of which
371,500ql is NPS with a total cost of 286.4 million
dollars, Agri Commodities won for the supply
of 100,000ql of Urea with 30 million dollars,
Witraco will supply 150,000ql of NPS with 78.5
million dollars, Helm Ag is to supply 50,000ql
Urea with 19.1 million dollars and India Agro will
deliver 22,539ql of Urea with 9.8 million dollars.
Yara, a Swiss based international grain and
fertilizer trader with a history of financial awards
to Ethiopian officials through Yara International,
has been prominent in Ethiopia’s fertilizer market
for many years and is now going to supply over
half of the current round of government fertilizer
The tender was floated in 19 lots, eight for Urea
and the remaining 11 lots for NPS. Yara won 11
lots while the remaining eight went to the other
four companies. The expected delivery time for
all the fertilizers is May 2015. The auction was
divided into 19 different lots to avoid overlaps in
the delivery to the Enterprises and at the Djibouti
port, said Shiberu.
Many products are imported through the port of
Djibouti, so to avoid the overlap we scheduled to
transport only three consignments every month,
he added.
While the price of fertilizers per ton was 321
dollars in October 2014, the time when the
government purchased the fertilizers, by the next
month, it had declined to 311 dollars per ton. But
it increased to 312 in December 2014, according
to YCharts, a provider of financial information
based in Chicago and New York (US).
The Agricultural Inputs Supply Enterprise (AISE)
is a public enterprise established in 1985 and
accountable to the Ministry of Agriculture (MoA).
The Enterprise has 31 million Br in assets,
including 22 warehouses, seven distribution
and sales outlets and 36 vehicles. It managed to
achieve a net profit of 35.4 million Br during the
2011/12 fiscal year and 35.6 million Br during
the following year.
In a nutshell
The government
is constructing
four fertilizer
factories with
annual capacities of
T h e g o v e r n m e n t i s
expecting to receive 150,000ql
this January which is part of
the 900,000ql the government
purchased with 431.9 million
dollars from five companies.
The tender was floated in
19 lots, eight for Urea and
The AISE buys and distributes
agricultural inputs, including
fertilizers, farming chemicals,
A d v e r t i s e m en t
the remaining 11 lots for NPS.
Yara won 11 lots while the
remaining eight went to the four
The AISE announced a
tender in August 2014 for the
purchase of 521,000tn of NPS
and 373,000tn of Urea.
different kinds of seeds, plants and
animal medicines and vaccines,
and laboratory equipment. The
Enterprise imported 552,000tns of
fertilizer in 2010/11 and 560,000tn
the following year. Its imports in
2012/13 were down to 477,000tns.
The government is constructing
four fertilizer factories in the Tigray,
Amhara, Oromia and Southern
regional states, with annual
capacities of 25,000tns of fertilizer.
Currently, the Country cultivated
14.1 million hectares of land with
cereal and pulses and the use of
fertilizer per hectare reached 63Kg,
according to a data from the MoA.
P ag e 12
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
Addis Abeba PM Hailemariam Suddenly Removes
Offers to
Head of Intellectual Property Office
Legalize Illegal
Land Grabbers
few are coming
forward out of a total of
nearly 45,000
Addis Abeba City Administration is issuing 44,547
ownership title deeds for households built on
undocumented land.
The registration process of the residents of the city
who own undocumented and illegally occupied land
between May 1996 to April 2005 has already begun; this
process is applicable for lands grabbed only within the
given period of time; these are plots of lands occupied
without permission from the city administration, illegally
expanded lands and lands occupied by farmers for
residential purposes.
In line with the line map produced by the city
administration in 2005, the administration plans to
issue 44,547 ownership documents. The decision was
made last year and the action will be done in reference
to Directive 18/2014, which treats lands that are not
documented by an authorized body; lands that are
occupied illegally and lands occupied by farmers for
residential purposes.
Owners of 75 sqm plots of land that are occupied for
either residential or commercial use will pay an initial
lease price; but if it is more than this, it is mandatory to
pay based on the seasonal lease price.
The Addis Abeba land area covers approximately
52,000ha, and the City Administration established a
land bank in 2013 in order to facilitate the lease process
overseen by the City Cabinet, the highest executive body
of the Administration.
However, acquisition of plots that contradict the line
map, lands that were temporarily given for SMEs for
storing sites at construction materials, for production
of construction inputs (quarry) will be taken by the
city administration. Moreover, lands that are illegally
occupied after 2005 will be taken by the administration
and the land will be codified and put into land bank; and
any construction on these lands will be demolished and
the land will be taken away.
As some documents by Transparency International
indicated, after the 2005 election, the city administration
was faced with a power vacuum because a significant
area of land was taken illegally. As far as acquisition of
land is concerned, this action was brought up in order
to overcome illegality; this process will also help the
administration to transform the city’s land into process
of registration, says Markos Alemayehu, communications
officer for the city’s Housing Development & Urban
Renewal Agency.
This is the second time that the city administration has
taken this same measure of registering undocumented
lands and issuing documents for occupied lands acquired
before 1996 since 2010. In line with this, the city
administration settled ownership issues of 60,600 lands
and documents were issued, said Markos. But that was
for lands that were not documented, he added, not those
that were illegally possessed.
For this purpose, the administration has a project
office that specifically deals with the issue at the city
level. Moreover, at Woreda level, there is human
resource arrangement of two experts selected by the
respective district, one appointee by each Woreda
and representatives from every level of social/political
arrangements (leagues).
The previous experience was initially scheduled to be
completed within six months but later found to take three
years. Currently, the city is making announcement via
media for those residents to whom the new offer applies,
but only few are coming forward so far, Markos says.
“We will exert our efforts so that it will not become a
drawn out process like in 2010,” Markos added.
It is after the people have registered that the city
administration will decide if those registered deserve to
get documents for the land they occupied.
rime Minster Hailemariam
Dessalgne removed
Berhanu Adelo, a veteran
EPRDF official from his
post of director general of the
Ethiopian Intellectual Property
Office (EIPO) as of January 2, 2015.
A letter from the prime minister’s
office sent on January 2, 2015,
removed Berhanu from his post and
assigned Girma Bejiga, who was
director of patent at the office, as
an acting director general effective
the very same day, according to
Berhanu started working as a
teacher at Teacher Training institute
(TTI) in Bonga and worked up
to head Prime Minister’s Office.
In addition, he was also Assistant
Chief of Justice for the Southern
regional state, lecturer at Civil
Service College and Minister of
Cabinet Affairs. Berhanu was also
one of the 36 members of the
politburo, where there were nine
representatives from the South,
along with Hialemarim and Shiferaw
Shigute since 2010.
During the 2010 election, he ran
against independent candidate
Ashebir Woldegiorgis, for the seat
in the parliament of Bonga, which
he lost to Ashebir.
Girma joined the office in 2005
and worked as junior trade mark
examiner, patent team leader and
A d v e r t i s e m en t
Berhanu Adelo,former director
general of EIPO.
patent director through the years,
until his latest assignment as
acting director general replacing
Berhanu. Girma has a BA degree in
physics from Addis Abeba University
(AAU) and masters from Italian
Turin University in intellectual
property. Before joining the EIPO,
he was a teacher at different high
schools in the Oromia regional state.
EIPO was established in 2008
with the aim of facilitating the
provision of legal protection for
exploitation of intellectual property
in the country, collecting, organizing
and disseminating technological
information contained in patent
documents. It also encourages its
utilization, study, and analysis. It
recommends policies and legislation
on intellectual property. The office is
accountable for Ministry of Science
and Technology (MoST) headed by
Demitu Hambisa.
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 13
Berhan Bank Enjoys Increase in Profit
Berhan International Bank S.C. has
seen a year of glimmer with a rise of
71pc in its profit after tax reaching
89.3 million Br with the earnings per
share also increasing to 239 Br from
205 Br.
The increase in the income of the Bank
from both interest and non interest
incomes have been the major factors
to the growth that the bank registered.
The interest incomes of Berhan
have gone up by 93pc reaching
167.8 million Br and the non-interest
incomes increased by 48pc reaching
131.4 million Br.
The gains of the Bank from foreign
exchange dealings have also increased
by 40pc to 45 million Br and service
charges and commissions increased
by 55pc to 82.9million Br. In relation
to this, the bank was some how
challenged on its acquisition of foreign
exchange, which it is trying to work
out by attracting more exporters
and agents on remittance service to
work with the bank, said Solomon
Berhan International Bank Financial Performance in 20013/14
2.81b Br
2.2b Br
435.5m Br
299.2m Br
177.5m Br
89.3m Br
239 Br
Illustrated by Fortune
Alemseged, board chairman of the
The total income of Berhan in the
2013/14 fiscal year was 299 million Br,
which increased from the preceding
year’s 176 million Br gain. The Bank
has also managed to increase its
customers number to 59,176 from
the preceding year’s 38,952.
Although the incomes of the Bank have
increased staggeringly, the expenses
have also showed considerable
increase from the prior year. The
general and administrative expenses
increased by 74pc reaching 102.4
million Br and interest expenses
increased by 55pc to 60.6 million Br.
A d v e r t i s e m en t
Source: Berhan International Bank Annual Report, 2013/14.
“As Berhan is new to the industry,
further expansion in staff and general
administrative expenses is inevitable
and the management of the Bank
should keep an eye on expenses,”
says Abdulmenan Mohammed
Hamza, an analyst that works for the
Portobello Ltd., a London Based assets
management firm.
The total number of staff of Berhan
as of June 30, 2014 reached 693,
increasing from the previous year’s
The provision that the Bank
maintained for doubtful debts have
decreased from nine million Br in
the previous year to 4.4 million Br.
Although the provisions decreased,
Berhan has maintained 10.1 million
Br of guaranteed claim which is rarely
observed in the banking industry.
Banks provide guarantee certificate
to customers for certain amount
upon having adequate security on
customer’s property and they charge
fees for that. The customer of the
certificate holder can claim his
amount from the Bank if the certificate
holder fails on the contract.
The total assets of the Bank have
also increased by 28pc reaching 2.8
billion Br. From its 38,952 customers,
Berhan was able to mobilize a deposit
of two billion Br, disbursing 1.2 billion
Br of loans and advances which grew
by 21pc. The loan-to-deposit ratio of
Berhan has declined from the previous
year’s 60pc to 58pc, which is around
the industry average of 57pc.
“Despite increase in the number of
bank users throughout the nation,
however, stiff competition has been
present for deposit mobilization.
Thus, we have observed that different
strategies need to be implemented in
order to enlarge deposit amount and
depositor base,” said Solomon in his
statement to shareholders.
The bank has crafted new strategies to
raise the Bank’s deposit amount and
customer base by focusing on micro
depositors and expanding branch
outlets, the statement said.
The liquid assets at Berhan have
shown increase in all aspects. The
cash and bank balances increased by
33pc to 981.6 million Br. The ratio of
the liquid assets to deposits increased
to 49pc from the previous year’s 46pc.
The liquid assets to total assets ratio
also increased from 33.6pc to 35pc.
The industry average for the liquid
assets to total assets is 27pc and the
ratio of liquid assets-to-total deposits
is 35pc.
The paid-up capital of the Bank
has also shown an increase of
39pc reaching 435.5 million Br,
which require it to only grow seven
percents a year to reach the National
Bank of Ethiopia’s minimum capital
requirement of 500 million by 2016.
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
F e a t u r e
Photo by: Kalkidan Mihretu
P ag e 14
Friday evening, January 10, 2015 language students taking evening class at Texas International Study Center, Dembel branch.
Amharic, Not Just For Ethiopians
In the near past, only International languages were taught in language learning centers. But there is a
new addition to the list of languages as the official Ethiopian language, Amharic,has joined the ranks.
SNETSEHAY ASSEFA, FORTUNE STAFF WRITTER, has looked into the reason behind the rise in demand as
well as the teaching- learning process.
awrence Square, 31, born in
Alabama, US is the CEO of Karay
Golf Ethiopia. He is engaged in
the business of promoting golf
tournaments and building golf centers,
which led him to live his life shuffling
between DC and Addis Abeba. He does
business with a lot of Ethiopians where the
Amharic language can come in handy for
better business communication and social
engagements, stated Lawrence.
Because of the number of requests
from people that want to study Amharic,
personal and small group classes have
been set up by various language schools
to meet the demand, according to Henok
Yibeltal, deputy manager of English Zone
Language School. For the past nine years,
English Zone has been giving Amharic as
well as other language courses in its two
branches across Addis Abeba.
Most of the people who come to take
the class are international organization
employees, businesspeople, volunteers
and researchers, according to Melkamu
Mulluneh, general manager of Texas
International Study Center. The students
use Amharic language to conduct their
business, to study the culture of Ethiopia
and to improve their social interaction with
Since the students
are living in an
Amharic speaking
community that
allows them to
practice wherever
they go.
the community, he added.
But the level of Amharic proficiency and
interest of focus varies from one student
to the other, Melkamu stated. Some
students prioritize learning writing skills
while others immerse themselves in oral
communication, stated Henok. There is
also a small portion of them that comes to
learn basic conversational words such as
greetings, expressions of gratification and
A d v e r t i s e m en t
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 15
Photo by: Kalkidan Mihretu
praise, he added.
Lawrence has registered to start classes
in English Zone focusing on oral
communication since he has prior
knowledge of Amharic. He took an Amharic
language class when he was in DC, mainly
focusing on writing skills. He used to pay
100 dollars per month for a three-hour per
week session. In English zone, for the same
course, students pay 3,600 Br a month for
personal classes but if people come with
two or three companions,which is rare,they
pay 2, 400 Br.
During the summer time, more students
are admitted to the course while the
holiday seasons like December and
January see lesser admission, according
to Melkamu. On average,we receive
around 50 students a year, he added.
Texas International gives personal as well
as small group classes at 2, 700 Br and 4,
500 Br, respectively. The classes usually
run for three months for small groups
whereas a month and a half for personal
lessons, according to Melkamu.
The language schools have prepared their
own books to teach that consider factors
like level of a student’s proficiency, capactiy
and language skill focus, stated Melkamu.
For teaching communication they start
with simple greetings and then move on to
the advanced levels, according to Tesfaye
Befirdu, Amharic teacher at English Zone.
Tesfaye has a BA in Ethiopian Languages &
Literature and is currently finishing his MA
in Literature & Folklore. Different Amharic
teaching books by various authors as well
as their own are used during the course,
according to Tesfaye.
“We give more emphasis to the practical
part of teaching the language and
implement methods such as going out
to the city and engaging in shopping
F e a t u r e
Language are thought using various learning aids and this picture shows a language teacher using a video aiding material to thought his students.
They have
enthusiasm for
the language,
they quickly
learn Amharic.
A d v e r t i s e m en t
conversation, watching Amharic films,
using restaurant and transportation
services,” he said.
Since the students are living in an Amharic
speaking community that allows them to
practice wherever they go and have great
enthusiasm for the language, they quickly
learn Amharic, explained Melkamu. For the
writing part, students start with identifying
the Amharic alphabet (fidel)and their
respective sounds, explained Tesfaye,
adding that method of repetition is used.
English is their main language of
instruction, according to Tesfaye. A
student that cannot speak English can
also be thought using pictures, symbols
and miming, he added. In fact Biniam
Hagos, language and cultural facilitator at
Peace Corps Ethiopia uses an immersion
method,which means the language is
thought mostly without translation. To
implement this they use miming, flash
cards and pictures, stated Biniam. This
method is very effective and recommended
but lack of resource and commitment can
be a challenge to implement it, Bininam
added. American Peace Corps members
have been coming to Ethiopia since 1962
to work in the agriculture, education and
health sectors of Ethiopia.
Currently, the Addis Abeba Education
Bureau (AAEB) has drafted training
directives for the language schools in order
to improve their quality and standardize the
language training, stated MasreshaZerihun,
general education inspection officer at the
Bureau. After the approval of the draft,
language schools will have to comply with
the standards set by the directive in order to
get a trade license, according to Masresha.
The directives will look into the learning
environment, teaching aid materials and
examine the teaching-learning process,
he added. The draft was submitted to the
Education Bureau management two weeks
ago. At present, all language schools are
conducting their business using the trade
permits they acquired for computer and
other vocational training licenses from the
Technique and Vocational Training Agency,
according to Masresha.
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 16
Chamber Research Blasts Government Procurement
A week after of the 11th Public Private Consultation
Forum (PPCF) focusing on challenges of the
manufacturing sector was held, the fifth round of PPCF
between the businesses and the Public Procurement
Administration Agency (PPAA) addressed the hurdles
faced by the four sectors in government procurement
process. At the same time, the research was criticised
by the Agency’s officials as a one-sided research only,
by covering the problems on the government side all
the while ignoring the business community.
Co-chaired by Solomon Afework, president of
the Ethiopian Chamber of Commerce & Sectoral
Association (ECCSA), and Tsegaye Abebe, director
general of the PPAA, the half-day long discussion
was started by a presentation of a research by Fikadu
Petros, senior consultant of the PPCF on the hurdles
faced by businesses from metal & engineering,
construction, information technology (IT) and textile
and garment sectors while they participate in the
procurement processes to purchase products for
government institutions.
The fifth round forum was held after the first two
forums were held on the construction sector. The
third round then followed with problems of textile
and garment sectors while the fourth round was
on major problems of government procurements
in general. The current forum, supported by the
International Financial Corporation (IFC) and the
Sweden International Development Agency (SIDA), was
held on Tuesday December 31, 2014 at Hilton Addis
Hotel, with the attendance of 300 businesspeople and
representatives from the Agency, including regional
“We still may have gaps in the process of procurement
and we are conducting research to solve the problems
by making amendments on the procurement
proclamation,” admitted Tsegaye.
He attributed problems by the Agency in implementing
the laws stated in the procedures of government
purchase and limited human resource capacity and
some corrupted staff.
The procurement process has problems of excluding
local businesses with standards and specifications that
are difficult to attain by local companies, Fikadu said
in his presentation. There are also such problems as
low preference margin in supporting local suppliers;
absence of manuals in the process of procurement;
taking dispute between businesses and the government
to the Court rather than taking it to arbitration and
making down payments for foreign suppliers rather
than for local businesses as general problems of the
four sectors, the research claimed.
The research also mentioned that universities were
becoming major challenges for the IT sector as they
are given priority to develop software for government
institutions without a tender process.
“Following the price variation in the market, the
government refused to make amendments on the price,
which led the case to be taken to court, which finally
led to the project delay and prolonged time in court,
demanding us to pay money for the legal procedure,’’
said one contractor.
The research recommended that the Agency should
reduce the 35pc rate of value addition on textile
products to 30pc; avoid the 12 months to 18 months
range to make the price amendment if the price
escalation occurs; improve down payment for the 30pc
that is practiced now to 75pc to 90pc, which the World
Bank(W.B) recommends for construction materials
that have been brought to the construction site; design
a prequalification evaluation; handle disputes between
government and businesses at arbitration rather
than court; support local IT businesses by avoiding
purchasing from foreign suppliers for simple software
and equipment.
While addressing the problems mentioned by the
research, the officials from the Agency criticised the
research, stating that it only aimed at emphasizing
problems with the government, by completely
ignoring the problems that the government faced from
businesses during the procurement process, including
delay in delivering the products or construction
equipment and delivering products and services out
of the contract both in quality and quantity. The other
comment from government officials was that they
cannot get the full research to understand the real
Photo by: Kalkidan Mihretu
dismissive of it as one-sided, but admit gaps in system
Tsegaye Abebe, director general of the PPAA (left) discussing with
Solomon Afework, president of the Ethiopian Chamber of Commerce &
Sectoral Association (ECCSA).
problems, rather they are given a
matrix of the research.
Yigezu Daba, director general of
Public Procurement & Property
Disposal Service (PPPDS),
which makes purchases for 174
government institutions, mentioned
they are facing problems in getting
A d v e r t i s e m en t
competent and efficient local
“Our main challenge is getting
competent local suppliers as
we want to procure most of the
products locally,’’ he claims.
“We do not have a problem of
capacity,’’ countered an IT
businessman. “The government
should conduct research to prove
The half-day discussion between the
businesspeople and the PPAA was
finalized with the agreement that the
Agency will consider the problems
mentioned from the research as
well as the businesspeople for
amendments of some procedures
and strong follow-up on the
implementation of the existing laws.
“We will all take this as input for
further research to understand if the
problems really exist and to make
changes as a solution. In addition,
as some of them need a policy
decision, we will evaluate the case
before adding to the amendment
of government procurement
and property administration
proclamation we are working on,’’
said Tsegaye.
PPCF was established in 2011
and organises a forum with the
government after conducting
researches by hiring international
consultants and using its
research wing named P.S.D Hub.
Improvements made so far,
following meetings with the Agency,
include the establishment of public
private partnership (PPP) and
the amendment of government
procurement proclamation along
with its implementation directive
and regulation.
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
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P ag e 18
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
Africa Insurance Boosts Profit by 40pc
Suffers an underwriting reversal with huge surplus turning to deficit
Africa Insurance Company, one of
the first insurance companies in
the country that reached their 20th
anniversary, managed to increase its
profit after tax by 42pc reaching 37
million Br and the earnings per share
reached 478 Br from the prior year’s
408 Br.
Although the Bank has registered such
a profit increase in the fiscal year, it
has incurred an underwriting deficit
of 94o,584 Br, falling down from
the preceding year’s surplus of 24.6
million Br.
“This is disappointing performance
in the general insurance business,’’
says Abdulmenan Mohammed Hamza,
an analyst with the Portobello Ltd.,
a London based asset management
firm, raising the point that this is
caused because of the increase in
the direct insurance management
expenses, which have increased by
51.2pc reaching 39.5 million Br.
This point is also shared by the chief
executive officer (CEO) of the Company,
Kiros Jiranie.
“The deficit is because of the increase
in the general administrative and
staff expenses, which is inevitable to
motivate the workers of the Company
and the loss ratio registered in the fiscal
Africa Insurance Financial Performance in 20013/14
643.6m Br
424.4m Br
87.1m Br
50.5m Br
6.5m Br
36.8m Br
478 Br
Illustrated by Fortune
year,” says Kiros.
The total loss ratio of Africa in the fiscal
year 2013/14 was 89.5pc, out of which
95pc is loss from motor insurance.
This shows an increase of 4.2pc from
the prior year.
Although the Company experienced this
loss, it was able to compensate it with
investment activities. The interest on
saving that Africa has gained increased
by 91.2pc to 13 million Br and rental
incomes increased by 151.8pc to 26.2
million Br while the dividend on shares
increased by 0.08pc reaching 11.9
million Br..
As the incomes of the Company from
different sources increased, the general
administrative expenses without the
provision have increased by 12.7pc
reaching 15.3 million Br and the
reversing of the 8.7 million Br that was
held as provision for doubtful debts
Source: Africa Insurance Annual Report, 2013/14.
was reversed contributing 20pc share
to the profit before taxation.
During the fiscal year 2013/14, Africa
paid and provided 216.4 million Br for
the claims and the earned premium,
which was 241.7 million Br, was
consumed by the claims paid and
provided. Even though this figure does
not have much difference compared to
the previous year’s amount, it accounts
for the 89.5pc of the net premium
earned when this figure shows less than
50pc in other insurance Companies.
“This is very concerning and the
management of the Africa should
review its risk management policies and
take appropriate measures to reduce
claims at acceptable levels,” comments
But this figure is not concerning to
the Company. It is rather acceptable
according to Kiros.
without the
provision have
increased by
12.7pc reaching
15.3 million Br
“This needs to be seen in accordance
with the investment we have made
and our route is risk distribution
as we do to the reinsurers and we
implement speedy settlement to claims
and prudent underwriting,” says Kiros.
The paid-up capital of the company
reached 87 million Br growing by
30pc. It is also planning to expand
this figure to 160 million Br by the
end of the current fiscal year setting
the authorised capital to 180 million
Br, which will not only make it double
its current capital but also surpass
the National Bank of Ethiopia’s (NBE)
minimum insurance firms capital
requirement of 60 million for general
and 75 million for life insurance.
The auditor’s report for the Company’s
statutory deposit according to the
NBE proclamation number 86/1994
indicates that it does not comply with
the proclamation. The proclamation
requires the Company to deposit 15pc
of its paid-up capital to the Bank every
year but the figure at the balance
sheet has no difference from the
previous year’s 10 million Br which is
3.05 million Br short of the required
“This is because we make the deposit
at the end of the year, which is now
not the case with the Company’s
statutory deposits; we have fulfilled the
requirement,” says Kiros.
A d v e r t i s e m en t
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 19
P ag e 20
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
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P ag e 22
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
I am tired.
Ismail Omar Guelleh, president of Djibouti, said this while expressing his
feeling about governing the Horn of Africa nation for long. Guelleh, 66, who has
been leading Djibouti for 16 years now, told Jeune Afrique, a French magazine
published by the Paris-based Groupe Jeune Afrique, that his governance mission
is about to be accomplished.
Parliament sits daily from November 2 until June 30, and is open to the public. Friday
is Private Members’ Day. Proceedings are conducted in Amharic and the day begins
with a prayer and readings of the minutes taken the previous day as no reports of
debates are as yet circulated or published. Debates are often lively in the Chamber of
Deputies, and local interests are strongly defended. The Chamber does not hesitate to
reject Bills or even Imperial Proclamations. Either house can initiate legislation as can
the Emperor or his ministers. However, everything concerning the spending of money
or new taxation must be debated first by the Chamber of Deputies, and the Bills pass
back and forth between the Chambers with amendments. If the two houses cannot
agree, it goes to the Prime Minister and then to the Emperor.
Source: The Handbook for Ethiopia, Copyright 1969, University Press for Africa.
. . . the total number of
refugees from South Sudan,
in Ethiopia, according to
the United Nations High
Commission for Refugees
(UNHCR). About 75pc of
the refugees came to the
country after December 15,
way back when . . .
Rear facade of the palace of Bitwoded Haile Giorghis
Source: The City & Its Architectural Heritage, Addis Ababa 1886-1946.
Ethiopia Imports Cotton to Meet Demands
The Ethiopian Textile Industry Development Institute imported
over 3,000 tons of cotton to meet the need in the textile industries.
The government has also introduced a new system that allows the
textile factories to plant cotton in order to tackle the shortage of
raw material in the industry which is implemented by Ayka Addis,
Adama Textile and Selin Dewan textile factories. Because of the
shortage of raw materials, the revenue from the textile industry is
affected the revenue for the five years being one third of the plan.
The Ethiopian Herald, January 3, 2015
360m Br Transformer Plant Reaches Finalization
The construction of a transformer manufacturing plant is
reaching its finalization with about 95pc of the construction being
constructed. The factory construction done by 360 million Br has
a capacity of manufacturing 10,000 transformers a year and has
already taken contracts from electric and telecom companies to
supply them with 10,000 transformers this year. The carrying
capacity of the transformers that the factory manufactures is
315kw power and it has plans to export its products to the
neighboring counties as it is the only one in the eastern Africa
The Ethiopian Herald, January 6, 2015
5.3b Br Worth Projects Became Operational
Ninety four investment projects registered under the Ethiopian
Investment Commission with a registered capital of 5.3 billion Br
have become operational in the past five months creating 3,000
permanent job opportunities. In Addition to these projects, the
Commission has also licensed 228 new projects which have
deposited a minimum requirement of 200,000 dollars each. The
Commission planned to issue 2,633 licenses in the four years of
the Growth and Transformation Period which it has surpassed.
The four years GTP period has seen the projects creating 61,000
permanent and temporary job opportunities.
The Ethiopian Herald, January 7, 2015
Agency Imports 8.6B Br worth Agricultural Inputs
The Ethiopian Agricultural Development Supplier Agency is
importing 8.6 billion Br worth agricultural inputs that would be
distributed to the regions in the country. The inputs are fertilizers,
vegetable seeds, pesticides, herbicide, vet medicines and spraying
machines. The inputs are 400,000 tons of Urea and about 521
tones of NPS fertilizers out of which 144,000 tons have reached
port. The inputs will fully be transported to the country by the end
of May, 2015. The logistics service is also given by the agency itself
that has 40 vehicles.
The Ethiopian Herald, January 7, 2015
SME Agency, Enterprises Discuss Challenges
The Federal Small and Micro Enterprise Development Agency
(SMEDA) held a panel discussion with the sector actors on
the challenges they are facing towards achieving their targets.
Enterprise owners from different regions expressed their
challenges. The major challenges that these people face are capital
loan, and infrastructure around the production shades. The
Agency that stated its willingness to listen and solve the problems
that the enterprises are facing, recommended the enterprises work
with their full capacity to achieve their goals. The panel organized
by the agency and Fana Broadcasting Corporate brought enterprise
heads, industry experts, and SME enterprises together and they
expressed their concern on the devalued performance of the
manufacturing sector and the rules and regulations.
The Ethiopian Herald, January 2, 2015
By Million Kibret
Learning for the Future
The advent of the government’s joining of capital markets to raise
financial resources required for the nation’s growing appetite
for infrastructure is praiseworthy. As the country is increasingly
becoming a magnate for global investment, we may not afford to
alienate ourselves from the global capital markets, the epicenters
for the world of finance.
Financial Times, the global authoritative media on business and
finance, praised the event with a headline “Investors pile into
Ethiopia’s $1bn debut debt sale”. The Economist, the 170-yearold global newspaper, had referred to Ethiopia as “Africa's
fastest-growing non-oil economy” in May 2012. Followed by The
Guardian calling the Country “ ‘Africa’s Lion’ with fastest creation
of millionaires” in its December 2013 issue.
Amidst all the good names for the country from the global
mainstream media, it is not uncommon to be surprised with
the fact that many senior level professionals in the country’s
financial and business institutions are still not familiar with the
basic terminology and practices of the global world of finance. A
friendly discussion on ‘market capitalisation’ of some of the major
corporations of the planet could trigger confusion for a senior
manager at a financial institution, as he may not be familiar with
the phrase otherwise commonplace throughout the cubicles of
the corporate world.
Owing to our communist era springboard with extremely
distressed financial and business practices, the issue of financial
illiteracy prevalent with our financial and business institutions and
professionals may not be hugely surprising. However, in order to
be able to curb future mishaps in the financial industry, it is high
time that we got acquainted with the basic theories and practices
making up for the past.
As their major competitive advantage is highly trained manpower,
banks and other financial institutions throughout the world
are known for fighting to grab their fair share of the cream
of top brains in finance and business from prestigious higher
education institutions before, during and just after the graduation
ceremonies. The burden of proof to explain the fact that an
institution is the best employer to deserve a target candidate
ironically is shifting to the employer. If therefore is true that
whoever has the golden brain rules in the game of business.
The financial world has become so inextricably interwoven that
the global financial crisis of 2007/08 happened due to and as a
result of it. The effect of Collateralized Debt Obligations (CDO’s)
that bundled and then unbundled financial instruments in a way
that could be sold and re-sold on global capital markets based on
stratified tranches of various levels of risk and return were earlier
downplayed by many in the industry either due to negligence or as
a result of inadequate financial literacy and acumen on the side of
sophisticated investors and the unassuming individual investors.
The event was reminiscent of what scientists call the ‘Principle
of Chaos’ or ‘the butterfly effect’: “a butterfly flapping its wings in
New Mexico could have a power to trigger hurricane in China”.
The Ethiopian government worked on its assignment to build
the country’s economic status and image; got sovereign rating by
reputable global rating companies and hired international firms
to prepare the required documents and procedures for the road
show to raise the required financing from capital markets. The
same applies to our financial institutions in preparing themselves
to be part of the global capital arena through building their
institutional capacities.
Top-notch economists armed with minute-by-minute details of
the micro and macro economic events of the nation shall be the
engines of our financial institutions. Sharp business analysts with
technical and intuitive capacity to arrive at business valuations
of corporations need to be at the forefront of our banks and
insurance companies.
Practical researchers highly proficient at working on analysing
the operations of the various sectors in the economy are required
at the financial institutions not only to arrive at determining
the viability of the sectors in order to help decide on the credit
worthiness of the loan applicants, but also to lead business
institutions to a more viable operations.
As the country is going forward, in the near future, indigenous
and international companies operating in Ethiopia might need
to raise finance from the international capital markets. Ethiopian
financial institutions are expected to spearhead the activities in
the modern way and it is high time they prepared themselves for
the big show.
Providing a commercial loan of a million Birr to a trader against
collateral valued at twice the face value of the debt might not
have called for the acumen of a modern financial analyst. But
spearheading viable national economic performance and raising
millions of dollars with the sophisticated global capital markets
Million Kibret is managing partner at BDO Ethiopia. He can
be contacted at [email protected]
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 23
A better oil price projection could be made based on a five-year forward price, argues Jim O’Neill, former chairman of Goldman Sachs Asset
Management and research fellow at Bruegel, a Brussels-based economic think tank.
Will Oil Price Rebound in 2015?
n late 1979, I began work
on my Doctoral thesis, an
empirical investigation of the
Organisation of Petroleum
Exporting Countries (OPEC) surplus
and its disposal. It was the end of
a decade in which oil prices had
undergone two dramatic increases,
and most of the various geniuses of
the day were confidently predicting
that they would continue to soar,
from under 40 dollars per barrel – a
historic high at that time – to above
100 dollars. By the time I finished my
research in 1982, the price of oil had
begun what would become a 20-year
plunge. It would not hit 100 dollars
per barrel until January 2008.
I used to joke that the most important
thing I learned from my research was
never to attempt to forecast the price
of oil. As 2014 comes to a close, the
price of oil has just crossed the 100
dollars threshold again - this time
headed down.
One of the big questions for 2015 is
whether the decline will continue.
Despite my earlier cynicism, I think
I know the answer.
Over the past 33 years, I have had
plenty of opportunity to study both
oil prices and foreign exchange rates,
including overseeing a research
department of talented people trying
to predict their movements. The
Oil prices may continue to
drop in the short term, but
they are likely to go higher.
experience has left me with a good
deal of skepticism - not to mention
bruises. But I do believe that it is
possible to make a broad prediction
as to where oil prices are headed.
Over the course of my career, I have
tried to determine whether there
is such a thing as an equilibrium
oil price. I have spent many hours
trying to guide, cajole and beg my
energy analysts to create a model
that might identify it, just as we
have for currencies, bond yields,
and equities. I have also discussed
the idea with industry experts, most
of whom believe that one exists, but
that it moves around a lot, because it
is greatly influenced by the marginal
cost of oil production – itself an
unstable variable.
My conclusion is that a good
indication of this moving equilibrium
does exist: the five-year forward
oil price or the amount paid for
guaranteed delivery of oil five years
from now.
In my ongoing quest to become
better at forecasting, I began, a
few years ago, to pay attention to
the five-year forward oil price as
it compares to the Brent crude oil
spot price, the price of a barrel
of oil today. I suspect that the fiveyear forward price is much less
influenced by speculation in the oil
market than the spot price and more
representative of true commercial
needs. So when the five-year price
starts moving in a different direction
than the spot price, I take notice.
In 2011, after both prices had
recovered from the collapse induced
by the 2008 credit crisis, the fiveyear price started to come down
gradually, while the spot price
continued to surge for a while. This
jibed with what I had identified
as two big factors fundamentally
driving the price of oil: the early
days of the exploitation of shale oil
and gas in the United States, and the
shift in China’s economic focus from
quantity to quality, which implied
that the Chinese economy would no
longer be consuming energy at the
frenetic rate it had been.
I concluded that there was a fair
chance that oil prices were peaking
and that before too long spot
prices would reverse and start to
decline. I thought it was probably
the beginning of a move back down
to 80 dollars per barrel - precisely
where the price has landed at the
end of 2014.
The spot price has even recently
slipped below that level. It was one
of my better forecasts.
I no longer make predictions for
a living, but I do know one thing:
Oil prices will either rise or fall.
And I suspect that I know which
way they will go. I recently read
an article that suggested that, if oil
prices remain at recent levels, US
production of shale oil and gas next
year could be 10pc below recent
projections. That seems plausible;
and, given how important shale oil
and gas has become to America’s
economic recovery, it also seems
like something that US policymakers
would be eager to avoid.
They may very well get their wish.
Oil prices may not start rising in the
coming months, but, as 2014 comes
to a close, forces that will eventually
halt their decline are beginning to
The drop in the spot price of oil has
taken it significantly below the fiveyear forward price, which remains
close to 80 dollars per barrel. My
hunch for 2015 is that oil prices
may continue to drop in the short
term; unlike in the past four years,
however, they are likely to finish the
year higher than they were when it
By Eidmon Tesfaye
Why Getting Assab Port Back Matters to Ethiopia
ccording to the United
Nations Human
Development Report of
2013, Ethiopia is one of
the eight countries in the world
with the lowest human development
index (HDI) and one of the two
countries, Niger being the other,
with the highest multidimensional
poverty index (MPI). Despite the
much publicised double-digit
economic growth over the last
12 years, Ethiopia has one of the
lowest per capital gross domestic
product (GDP) in the world, just
a little ahead of Burundi, Niger
and Central African Republic
(CAR), based on the 2012 World
Economic Outlook Database of
the International Monetary Fund
(IMF). Further, compared to its
immediate coastal neighbors, it has
the lowest per capita GDP, less than
those of Somalia and Eritrea; the
highest MPI; and the lowest HDI,
excepting Eritrea.
The country is also one of the
most populous in the league of
landlocked countries, with a
population size fast approaching
above 90 million. It was officially
rendered landlocked by a dubious
and ignominious decision of the
government in power and its
international backers.
The bogus international
treaties Ethiopians have
been forced to accept have no
binding force.
Since most of the country's importexport trade is conducted through
sea transport, and because Massawa
and Assab are no longer viable
options, Ethiopia is forced to rely on
the ports of neighboring countries,
especially Djibouti, Kenya, Sudan
and occasionally, Somalia. However,
the costs of transportation to most
of the destination ports are very
prohibitive in view of the long
distances and poor land transport
About 90pc of the country’s importexport trade is now conducted
through the port of Djibouti.
Reports show that even the
Ethiopian Ministry of Transport
(MoTr) acknowledges relying on a
single port has become a bottleneck
for the development of importexport trade.
In the mid of the year 2008, the
cost of using the port of Djibouti
increased alarmingly. Until the
2008 fee increase, Ethiopia used to
pay more than 850 million dollars
to DP World Djibouti in port fees,
annually. The port is administered
by DP World Djibouti, a part of
DP World, formed in September
of 2005 with the integration of the
terminal operations of the Dubai
Ports Authority (DPA).
According to July 6, 2008 edition
of Sudan Tribune, the sudden and
unexpected new rates involved an
increase of up to 25pc in marine
charges, cargo port dues and storage
charges, and a 15pc increase in the
cost of container stevedoring. This
added an additional cost of at least
210 million dollars for the use of
the port by Ethiopia.
To put this all in context, a
2010 report by the United
Nations Conference on Trade
& Development (UNCTAD) has
shown that the amount landlocked
countries spent for the payment of
transport and insurance services
was more than twice the average
spent by developing countries, and
more than three times the average
for developed economies.
Paul Collier (Prof.), a renowned
development economist, argues
that while the majority of the five
billion people in the "developing
world" are getting richer at an
unprecedented rate, a group
of countries (mostly in Africa
and Central Asia) are stuck with
some sort of development traps
and suggests that development
assistance should be focused
heavily on them.
According to Collier, these countries
typically suffer from one or more
development traps: conflict; natural
resources; bad governance and
landlocked with bad neighbors.
Poor landlocked countries with bad
neighbors find it almost impossible
to tap into world economic growth.
Collier explains that countries with
coastline trade with the world, while
landlocked countries only trade
with their neighbors. Landlocked
countries with poor infrastructure
connections to their neighbors will
necessarily have a limited market
for their goods.
Thirty two of the forty-five
landlocked countries belong to
what is called the Land-Locked
Developing Countries (LLDCs), with
Africa contributing half of them.
These thirty-two LLDCs collectively
account for only two of the world’s
GDP, while occupying 12.5pc of the
world’s total land surface area.
Economic and other disadvantages
experienced by these LLDCs make
the majority of the landlocked
(Continued on PAGE 38)
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Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
Op-ed Notes
Election Processes as Definitive as Results
The historical records of the ruling
Revolutionary Democrats on elections are not
as favourable as on development. Their over
23 years of power are rather identified with
elections failing to meet global standards. A
changing matrix of controversies remains to
surround all of the elections of the past two
As another election era dawns, the air is getting
filled with yet another around of controversies
over the very processes of the election. The
latest controversies relate to the pre-election
process. It all comes as voter registration
started on Friday, January 09, 2014.
Disenfranchised by procedural flaws in the
election of electors conducted in the past
weeks, opposition political parties have started
to discredit the whole process as remotely
controlled by the ruling coalition that remained
in power for over 23 years. They argue that
the processes with which the electors were
chosen are far from the ideal case depicted
in the nation’s electoral laws. They accuse the
National Electoral Board (NEB), an authority
entrusted with the responsibility of organising
and managing elections, for conducting the
whole process in a way that serves the interests
of the ruling EPRDF.
Nonetheless, the electoral board rejects the
accusations as baseless. It argues that the whole
process has been conducted according to the
laws of the land.
This kind of tit-for-tat is not new to the political
space. It instead is a typical feature of the
space hosting considerable amount of rivalry,
animosity and grudges. It even seems as if
Ethiopian politics could not live without these
Elections are relatively new activities for the
nation that takes pride in its very old history
of statehood. Up until late 1990s, power was
obtained in the nation through the decisive
role of destructively competitive wars or coups.
Even the last regime, a military dictatorship
that claims affiliation with the global socialist
movement, was brought to power through a
student-led revolution. It took not more than
a year for it to transform into a full-fledged
It was after 17 years of struggle that the hope
of democracy shined back on to the nation’s
political space. This was related with the
overthrow of the military dictatorship and the
ratification of the nation’s first constitution.
With the historic change came elections as
the only means of ascending to power. This
not only empowered citizens to choose their
government, but also changed the rule of the
game. Competition for political power becomes
the new order of the day.
This new order also established multiparty
democracy as a guiding political framework
in the nation that has for long been ruled by
an omnipotent king or a despotic dictator.
At practical level, therefore, political parties
become the smallest units of the political
theatre. And their ascendance to power
becomes closely related to their ability to
convince voters to preferentially favour them
in ballots.
It is under this framework that the nation
is preparing to undertake its fifth national
and regional election. But, alike the four
previous elections, this latest one is witnessing
divergences in attitude, determination and
approach between the ruling party and its
As if to indicate that the divergence is somewhat
a permanent fixture of the nation’s political
space, the ruling party and its over 80
opponents have started to throw accusations
on one another. There is almost no consensus
between them. Each step within the election
process is becoming a cause for controversy.
The NEB’s latest rejection of claims from
opposition political parties, does little in the
form of helping the whole process be free,
fair, transparent and legitimate. If anything,
it puts weight on the long overdue claim of
the opposition camp that it serves the interest
Banking Smallholders
Microfinance is widely known
for the incredible speed with
which it has scaled to reach
hundreds of millions of people,
and the positive effect it has had
in reducing poverty.
However, what many people do
not know is that most of these
microfinance institutions are
located in urban and suburban
areas, and they largely target
the urban and suburban poor.
As a result, the largest group
of poor people in the world
- smallholder farmers - are
largely financially excluded.
While 55pc of Africa’s population
is engaged in agricultural
livelihoods, only approximately
one percent of bank lending
across the continent goes to
the agricultural sector. In
sub-Saharan Africa, 38pc of
adults living in cities report
having a formal bank account,
compared with only 21pc of
adults living in rural areas.
Smallholder farmers represent
two tremendous opportunities:
a market opportunity for any
financial institution looking
to grow their client base and
an impact opportunity for
all financial institutions that
have a social mission. The
total amount of debt financing
available to smallholder
farmers in the developing world
is approximately nine billion
dollars. This amount meets
less than three percent of the
estimated total smallholder
financing demand, which is
calculated to be 450 billion
dollars globally.
Farmers comprise the largest
and poorest group at the bottom
of the pyramid, so financial
tools for farmers have very
high impact potential. Sustained
growth in the agriculture sector
has proven two to four times
By Stephanie Hanson
more effective at reducing poverty and
improving livelihoods than growth in
other sectors.
Recent research shows this can be
as high as 11 times in sub-Saharan
Africa. The uniform profession of
farmers also means that providing
financial services to farmers is a highly
replicable business.
Perceived risk and lack of expertise
are the most significant reasons
that more banks and microfinance
institutions have not yet started
offering agriculture finance products.
Compared to urban lending, which
microfinance institutions are familiar
with and have developed expertise in,
rural lending feels quite risky. Most
banks and microfinance institutions
do not have internal expertise on
agriculture, and are unsure how to
structure loan products that would
both meet the needs of farmers and
mitigate the risk they take on by
lending to them.
Further, operating in rural areas
poses infrastructural and logistical
challenges. Margins will be lower
than when serving urban clients and
financial institutions will have to
build out either physical or human
infrastructure to reach remote rural
Currently, significant distances
between bank branches represent
a major barrier to rural financial
inclusion. There is a small but
growing movement of financial
institutions that have figured out how
to overcome these challenges and
lend to smallholder farmers.
The Initiative for Smallholder Finance
recently published a briefing on
direct-to-smallholder finance in
which they note that over 150
finance providers currently
offer direct-to-farmer finance.
To help facilitate the entry of
more financial institutions into
the sector, the Consultative
Group to Assist the Poor (CGAP)
is conducting research to better
understand the financial needs
of smallholder farm families.
But, in general, lending to
farmers is most effective when
we lend seed and fertiliser
instead of cash. Providing assets
to farmers ensures that the loan
is utilised for the intended
purpose, and overcomes the
challenge of limited access
to seed and fertiliser close
to the homes of our clients.
We also offer a completely
flexible repayment schedule
to accommodate the irregular
cash flow of most smallholder
Pairing loans with agriculture
trainings could also help
farmers to maximise the
income impact of the seed and
fertiliser that they use. These
principles allow our clients to
see at least a 50pc increase in
farm income per acre, as well
as ensuring loans are repaid.
With a global financing gap of
441 billion dollars, though, we
need thousands of financial
institutions to step in and start
serving this market. Farmers
are 70pc of the world’s poor.
Agriculture microfinance is
our best tool to significantly
reduce global poverty - and it
is also a promising business
Stephanie Hanson is
senior vice president of policy
and partnerships at One Acre
of the ruling coalition. This was furthered by
unequivocal affirmation of the process by the
ruling party.
If anything, the latest controversy is a showcase
that Ethiopian elections give less recognition
to processes than results. Unlike the global
experience, wherein processes are considered
as definitive as results, the focus of Ethiopian
elections is on the ends.
As the saying goes, though, the end defines the
means. There could be no democratic election
without democratic election processes. Be
in the pre-election or post-election period,
the structure and management of election
processes is very important to define the
legitimacy of the government to come to power
in the end.
Of course, focusing on election results is not
unique to the Ethiopian political space. It is true
to polities with no strong political institutions,
be it in Asia, Latin America or Africa.
Weak institutions, undeveloped democratic
culture and societal divisions are favourable
factors to a political culture that weighs results
more than processes. In the Ethiopian case,
this is furthered with the presence of over 80
political parties.
Yet, focusing on results is a reductionist
attitude towards democratic elections. Truly
democratic elections are identified with
processes that are inclusive enough to entertain
the concerns of all parties. Effective institutions
(and processes) of conflict resolution are also
parts of such elections.
As far as the latest controversy is concerned,
though, it seems that this attitude is absent in the
Ethiopian political space. The response of the
electoral board to the concerns of opposition
political parties is an affirmation to this trend.
Free, fair and credible elections are all about
processes. At the end of the day, the level of
credibility that election processes garner from
the voting public would have direct relationship
with the legitimacy a resulting government
would obtain. Regardless of the identity of
the party that manages to triumph over of
the election, such legitimacy is an important
source of power.
It is vital, therefore, that the overall attitude
towards elections is reoriented from one that
values results only to one that provides equal
weight to processes. This, in a way, means that
processes will be made as inclusive as possible.
If one has to be honest, though, the
disproportional responsibility for doing so
rests on the shoulders of the ruling EPRDF
and the NEB. By way of its incumbency, the
ruling EPRDF has the responsibility of putting
in place election processes that are able to
accommodate the concerns of all political
parties. As this will be the first election it is
going to take part in after the death of its
most influential figure, Meles Zenawi, so
much is expected from it in the form of firm
commitment to inclusive, credible and fair
election processes.
As an authority entrusted to manage elections in
the country, the NEB has also the responsibility
of making sure that all of the election processes
are credible enough. It needs to get out of
the attitude of rejecting concerns and adopt
a new perspective of taking every concern
seriously. It ought to make sure that concerns
are addressed on time and to a level satisfactory
enough to all parties.
No doubt that opposition political parties will
also take their fair share of responsibility in
this. Instead of just picking faults, they ought to
have the resolve to push the walls to make the
processes credible. After all, shouting from the
sides serves no political purpose at all.
Broadly speaking, though, the task for the
political players in the nation entails changing
their perspective towards elections. It is only
through such a change that the long overdue
controversies surrounding elections could be
solved. As the saying goes, problems could
not be solved with the same mindset they
resulted from.
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
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Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
Topic: Drilling of no.3 Boreholes in Welenchiti and Abomsa under the One WASH Plus Programme
1. Background
UNICEF-DFID One WASH Plus Programme (herein referred to
as the Programme) is planning to drill Three (3) boreholes for
Welenchiti (2 BHs) and Abomsa (1 BH) towns as part of the
immediate rehabilitation and upgrade of the water supply
systems. Eventually there will be a need for a second borehole
in Abomsa if the first one is found not to have enough yield.
The boreholes are supplementary to existing water supply
sources that is deemed insufficient to meet the requirements
of the towns in the medium term.
Hydro-geological survey was carried out by a consultant
hired by the Programme and to identify the drilling sites.
Comprehensive hydro-geological reports are available to assist
the contractor with any information he may require to organize
the bid.
UNICEF is seeking for a contractor to carry out the drilling
work and provide the proper tools, machinery, materials and
labor for construction of the borehole, its development and
pump testing. The electric pump installations, control room
civil structure construction and connection to the future
transmission main will be procured under a separate bid. All
works are to be implemented as per specifications provided
together with this terms of references.
UNICEF hereby invites potential Contractors to submit a
technical and financial proposal as per this ToR and annexed
Bill of Quantities and Drilling Specifications.
More details of the requirements for this bid can be found in
the RFP.
1. Objectives.
The main objective of this works is to assess the yield and water
quality characteristics of aquifers around the 2 selected towns and
develop a total of no.3 productive boreholes.
Interested and eligible bidders (all legal documents and renewed
licenses must be submitted) are invited to collect the complete tender
documents by sending an email to Mr. Ayele Wolde ([email protected]
org) or Mr. Deresse Damte ([email protected]). Starting on Monday
05-Jan-2015. Proposals are to be submitted to UNICEF Ethiopia Office
on or before 9.00 am (East African Time) 16- Jan- 2015 (Friday).
Please quote the RFP nr. 9116716 in all your correspondences. Due
to the nature of the bid, there will be no bid public opening for this
offer. UNICEF reserves the right to accept or reject part or all of any
or all bids.
UNICEF Ethiopia, UNECA Compound, NOF Building, 2nd floor Supply Section, Attn. Mr. Ayele Wolde, P.O.BOX 1169,
TEL: +251-11 518 4142/ 4167, Addis Ababa, Ethiopia.
This notice is placed on behalf of UNECA. You are therefore requested to direct all your queries to United Nations Economic Commission for Africa using
the fax number provided below.
Title of the EOI: Conference support Services at the United Nations Conference Centre (UNCC)- Addis Ababa
Date of this EOI: 26 December 2014
Closing Date for Receipt of EOI : 26 January 2015
EOI Number: 10618
E-mail Address: [email protected]
Address EOI response by fax for the Attention of: Ms. Rahel Desta, SCMS
Fax Number: +251 115 511874
UNSPSC Code: 80161500, 80161502, 80161504, 80161501
The United Nations Economic Commission for Africa (UNECA) in Addis Ababa, Ethiopia hereby seeks interested local contractors to provide Conference
support services at the United Nations Conference Centre (UNCC)- Addis Ababa. The local system contractor executes with due care and diligence
conference support related services by providing the needed qualified and skilled labour when ever requested by UNECA-AA. Among others the local
system contract provides upon request Conference Attendants, Conference Clerk, Ushers, Exibition Support Staff etc.
Interested firms will be invited to the tender by a “Request for Proposal” (RFP) at a later stage. This tender envisages selection of a single local system
contactor to provide Conference support services.
Please note that the UNECA is precluded from entering into contract with a firm that is not fully registered with UNECA. Those interested in responding
to this invitation but not currently fully registered as vendors with UNECA, are encouraged to register before submission of the bid. Further details may
be obtained by visiting In order to be eligible for UN Registration, please make sure to declare in writing the
Prerequisite for Eligibility criteria itemized from A-E as contained in EOI instruction attached.
Those interested should write to the above-mentioned e-mail address or fax number to submit their “expression of interest” by the deadline of 26 January
Vendors interested in participating in the planned solicitation process should complete the Vendor Response Form (
eoi10618.pdf ) of this EOI and fax it or email it to UNECA before the closing date set forth above.
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By Girma Feyissa
Celebrations of holidays vary with cultures. Sometimes, the variations entail cultural conflicts. It is this same
feeling that an Ethiopian, living abroad, would feel if celebrating Christmas overseas. It requires for a person to
go beyond the obvious to reconcile the conflicts and live in peace with oneself.
am in the middle of Europe, where
the European Christmas and the
New Year were joyfully celebrated,
regardless of the chilly weather and
extended long nights. There was a lot fun
and enjoyment in the dining and wining
on the eve of Christmas.
I am of the opinion that there is nothing
like being with friends, chatting about
home and sharing unique experiences.
The food is different. The cakes are sweet
and delicious.
There is nothing like celebrating events,
such as Christmas, with families than
spending the time in a solitary dungeon
they call a library. That was where I was
rolling back the years to 1989, when I first
celebrated Christmas where I should be
or rightly, where I should not be.
George Peter, an elderly classmate of
mine from Papua New Guinea, had invited
me for a dinner at his two-bed bungalow
in the suburbs of Leeds. We would first
drop at a small chapel, stay there for a
while and then go to his home for the
meal. Peter had his wife with him through
his family fellowship by the United Nations
Development Program (UNDP).
I was a bit apprehensive and excited.
Apprehensive because it was my first
time to be among European congregation
and did not know how to perform, and
excited because I wanted to set myself free
from my own company in that dungeon
of books and publications. The only
thing I had enjoyed then was the benefit
of having the computers all to myself.
The equipment was a rare resource at
the time.
When we went to the little chapel, we
met a number of people chanting hymns,
many of whom had held lit candles in
their hands. The head priest had earlier
given his benedictions and led us all to
A clash of cultures
one corner of the chapel where a large
table was laid with all sorts of food
and offerings enough to everybody
I helped myself to the varieties
which I knew to be safe and much
simpler to have a bite or two. My
Ethiopian upkeep held me back
from feeling free to turn to the
meaty stuff without being certain
about what it could be.
I was not sure even about the person who
might have slain the animal whose mutton
or beef is ready for eating. But, then,
there was plenty of French fries and fish
to go by. You may not forget that we were
in England, albeit the Midlands.
After we were done with what was taking
place in the chapel, we went to my friend’s
home. He had introduced me to his wife,
who was also an English woman.
She was too busy preparing some
pudding. The big turkey was getting
cooked in the oven. I could not stand the
appetizing whiff of a turkey being roasted
which will soon be ready on the table to
be cannibalized into teds and bits. I was
craving to have a chunk from a leg
and breast.
The big brown turkey was
placed in the middle of the
table, ceremoniously. When the
aluminum foil was peeled off, the
brown steaming turkey well stuffed
with all sorts of ingredients like
onions, garlic and other spices, drew
everybody‘s attention with its colour and
tantalizing flavour.
The master of the table, my friend Peter,
was invited to start the honorable task
of cutting turkey with a sharp carving
knife and passing pieces to each one of
us. Then he raised his glass of wine and
We are very poor
in promoting our
country and its ages
old history.
times for a
Merry Christmas
and we followed suit.
The taste was a bit sour but fitting for
the occasion. I do not remember the
accompanying dish but the desert was
an assortment of sweet fruits.
I was not comfortable with the
pudding. May be it was too pasty
for my tongue, I do not know.
Christmas Carole was heard
from the far away invisible
audio system. I was expecting an
Ethiopian piece instead. I never
thought that the experience would
make me feel miserably homesick.
That night, I could not sleep well. I was
carried away by nostalgic memories of
how we used to celebrate Christmas or
“Genna”, as it is popularly known in the
local parlance. My recollections of the
years since I had plucked my milk teeth
were still fresh in my mind.
The smell of smoking dry cow dung
and the banana leaves herald the eve of
Christmas as homemade bread was in
the making. Genna was the day when
students paraded to the Genet Leul
Palace for their annual imperial gifts of
orange fruits, biscuits and sweater from
the hands of the Emperor or his spouse.
Students from the Theology College
stage a show about the story of Virgin
Mary and her son - Jesus Christ. The
population of students then was only
a little more than few hundreds
in total.
In later hours, the Genna Team of
the Imperial Body Guard and the
Police would compete at Jan Meda.
Some teams mounted on horse backs
would have a match of Polo - a hockey
like game.
In my later years, I had realised that Genna
games were the only politically or socially
free days for the winners only. They take
the opportunity to speak their minds
freely taking the benefit of the traditional
saying “No offense on Genna Game!” The
winners would use idioms to tease the
losers, expressing concealed views of the
community which would not have been
openly told if it were not for Christmas.
Culturally, Ethiopians consider daring
views as offensive indulgence and so
prefer to keep in secrete. At times, they try
to involve singers, or “Azmaris”, as their
trade was known then, to make indirect
implications or puns that are openly said
but meant to implicate or slander others
Shepherds are known for such songs
as “oh Haloy”. They try to vibrate their
throats, produce a special sound with
their fingers cluttering the sound “oh
Haloy” and speak out the verse intended.
Some witty lords or even kings would ask
“what did the shepherds sing this time?"
to get the message of the community.
Earlier in the evening, I had sipped some
coffee made by the lady of the house,
Peter’s wife. She had made a detailed
fuss about her long years expertise in
the making business of coffee. For me,
the topic had opened a little window
to make an intervention to surprise the
family with the information that coffee was
first discovered in Keffa, Ethiopia, whence
the name “coffee” originates.
Peter’s resentment was evident. He could
not understand why Ethiopia does not
promote coffee as much as it should.
He said that whether we like it or not,
our leaders should be well versed in the
English language if they want to make
any impact on the world market or even
international politics. In short, we are
very poor in promoting our country and
its ages old history.
We should have known better that without
history, there is no country. To lead a
country, therefore, it is important to know
its history. Merry Christmas!
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Trade integration is the best solution to stabilise food prices, argue Amir Fouad, a research analyst for trade and competitiveness at the World
Bank and Ian Gillson, a senior trade economist at the Bank.
Food Prices: Good Intentions, Bad Outcomes
We welcome 2015 confronting an
all-too-familiar reality: there are still
people in the world without access
to sufficient and nutritional food.
One in eight people go hungry every
day, according to the United Nations,
including an estimated one in six
children under the age of five who is
The situation is especially dire for
those living in extreme poverty, whose
inadequate access to technology,
land, water, and other agricultural
inputs routinely imperils their
ability to produce or secure food
for themselves and their families,
especially as world food prices have
risen in recent years.
On a scale of one to somethingmust-be-done-now, tackling this
problem and ensuring food security
remains among the most pressing
development issues of our time. The
good news is the first Millennium
Development Goal (MDG) to
eradicate world hunger is achievable
- and the target to halve it by the end
of this year is close to being met. But
governments have too often failed
to meet their obligation to nurture
an enabling environment for food
security, and in some cases have
actually made it worse.
Trade policy can be a proactive rather than a reactive - tool in helping
to ensure greater food security.
Open trade and increased integration is an
excellent buffer for fluctuations in food supply.
Although world food prices have
risen in real terms in recent years
after three decades of decline, there
is no global shortage of food. The
problem is one of moving food, often
across borders, from areas with a
production surplus to those with a
deficit, at prices that low-income
consumers in developing countries
can afford.
That is, in today’s world, the
mechanisms that threaten global
food security often persist in the form
of barriers prohibiting the efficient
movement of food - not the existence
of the food itself - highlighting the
pivotal role played by political factors
and institutions in distributing food.
In fact, the notion that food may
be available even in instances of
perceived food shortage or high
prices, but the poor simply have no
access to it, has been around for
Many countries restrict imports of
food or discourage exports for one
simple purpose: to keep domestic
markets isolated from international
price changes. Exporting countries
can use export restrictions to lower
their domestic prices relative to world
prices, while importing countries may
raise import or consumption taxes
on food to protect their domestic
farmers from foreign competition.
The tripling of world rice prices in
2007/08 provides a good example.
Alarm over the drastic price increase
provoked unilateral bans on rice
exports, panic buying and hoarding
in many Southeast Asian countries.
But these policy actions had little
or no basis in the actual state of
regional rice supply and demand the region’s output of milled rice at
the time was the highest it had been
in the 21st century and nearly six
percent above its 2006/07 total. But
the governments were basing their
actions on a set of long-standing
and seemingly rational calculations
that using trade measures would not
only be effective in stabilising prices,
but less costly than using storage
policies alone.
In a theoretical sense, they were
right. Export controls or import
barrier reductions can be shown to
be an effective way for an individual
country to stabilise prices.
But the problem is of collective action
if countries act simultaneously. Even
countries not keen on instituting such
trade measures often find themselves
compelled to do so in response to
the actions of other countries. In
attempting to insulate their markets
against world price increases in this
way, countries wielding restrictive
trade measures shoot themselves in
the foot. Both export restrictions in
exporting countries and import tariff
reductions in importing countries
push up world prices. So with every
country simultaneously seeking to
reduce its price by the same amount,
world price increases become
exacerbated by the stabilisation
policies themselves.
Conversely, more open trade and
increased integration could be
an excellent buffer for domestic
fluctuations in food supply, thus
stabilising food prices, boosting
returns to farmers, and reducing
the prices faced by consumers. This
is because worldwide output of a
given food commodity varies much
less than does output on a countryby-country basis -with fewer barriers
at the global level, more food could
be imported in times of shortage and
exported in times of plenty.
As the Doha Round of World Trade
Organisation (WTO) negotiations
continue, taking concrete actions
to promote food security could play
a key role. The WTO’s Agreement
on Agriculture seeks a more level
(Continued on PAGE 38)
V iew point
Better Data Costs More
By Bjørn Lomborg
hile the world has generally
seen success with the
Millennium Development
Goals (MDGs) – half the
proportion of hunger and poverty, get all
kids into school and drastically reduce
child mortality – drawn up nearly 15
years ago, not all promises will be
What is somewhat surprising, however, is
that we have fairly little information about
what exactly we achieved. According to
World Bank data, in 1990, there were 850
maternal deaths out of 100,000 live births
in sub-Saharan Africa and this number
went down to 500 in 2010. However,
the World Health Organisation (WHO)
has warned that measuring the maternal
mortality ratio remains a challenge as less
than 40pc of countries have a complete
civil registration system that appropriately
attributes the cause of death.
Actually, most of the available numbers
are rather projections and estimates, not
data. In total, there are more gaps than
real observations and the observations
themselves are often dubious.
This matters, because the world is now
discussing a new set of targets for the
next decade and a half. To do the most
good, the Copenhagen Consensus Centre
(CCC), has asked 60 teams of the world’s
top economists to look at the economic,
social and environmental costs and
benefits of all the top targets. Of course
most of the attention is on the high-profile
Poor countries do not have
the capacity to collect
useful data.
issues like health, education, food, water
and environment.
But to be able to measure how well we
handle all these issues has real costs.
How much this will cost and how much
the international community can justify
spending in this way is the important topic
covered by Morten Jerven (Prof.) in his
new paper for the Centre.
Take the original MDGs. There were
just 18 simple targets. Data collection
for these targets had many gaps, and
much of the information collected was of
dubious quality. However, Jerven collates
the information we have about survey
costs across the world and estimates
that the proper monitoring of all 18
targets and 48 indicators would have
cost the world 27 billion dollars. That
is a significant number, but given that
the world will spend about 1.9 trillion
dollars over the same period, 1.4pc is
perhaps not unreasonable to spend on
getting information.
The problem is that the next set of
targets is growing ever larger. A highlevel panel with United Kingdom’s Prime
Minister David Cameron, President Susilo
Bambang Yudhoyono from Indonesia
and Liberian President Ellen Johnson
Sirleaf along with leaders from civil
society and the private sector suggested
59 targets and advocated building “better
data-collection systems, especially in
developing countries.”
And some months ago, 70 United Nations
ambassadors in the Open Working Group
proposed a bewildering 169 targets.
One of these argued that by 2020 the
world should “increase significantly the
availability of high-quality, timely and
reliable data disaggregated by income,
gender, age, race, ethnicity, migratory
status, disability, geographic location and
other characteristics relevant in national
Doing even a minimum data collection
for all these 169 targets will cost at least
254 billion dollars, or almost twice the
entire global annual development budget,
Jerven estimates.
And this is a very low estimate, since it does
not take account of basic administrative
data gathering by national governments,
or costs for all the household surveys,
which are recommended. And countries
where data has not yet been collected will
likely prove even costlier. Remember, six
of 49 countries in sub-Saharan Africa have
never had a household survey and only
28 have had one in the last seven years.
Moreover, there is a serious question
of capacity. Worldwide, only about 60
countries have the basic registration
systems needed to monitor trends in
social indicators. Many poor countries
do not have the capacity to collect useful
data on a national basis. In the 254 billion
dollars estimate, there is no allowance for
maintaining the statistical office, training
and retaining personnel, analysing along
with disseminating the data. There is
ample evidence that the MDG agenda
has already stretched statistical capacity
and strained statistical offices in poor
countries and that 169 new targets will
only make it much worse.
Most participants discussing the
Sustainable Development Goals (SDGs)
recognise that we need much, much
fewer targets. Taking into account the
formidable costs of data collection for
each target, it is reasonable to reconsider
the best number of targets.
For comparison: both the Norwegian
and British governments have official
statistical services, which cost about
0.2pc of their gross domestic product
(GDP). Using this figure as a measure
of willingness to pay would suggest that
we should aim more at four SDG targets,
which could be properly monitored,
rather than a massive 169.
Bjørn Lomborg (PhD), an adjunct
professor at the Copenhagen Business
School and directs the Copenhagen
Consensus Center (CCC). He is the author
of The Skeptical Environmentalist and
Cool It. His new book is How To Spend
$75 Billion to Make the World a Better
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 35
Procurement Reference Number AIB 013/2014/15
1. Awash International Bank S.C. invites sealed bids from eligible bidders for the
supply of Goods listed below.
Bid Advertisement
Unit of
Pass Book Printer
Dot-matrix Pinter
Laser jet Printer
Webcam Camera
Signature pad
Cisco Router
Cisco Switch
Color Printer
2. Bidding will be conducted in accordance with the open tendering procedures
contained in the Directives of the Bank and other Relevant Laws of the country,
and is open to all eligible bidders.
3. A complete set of bidding documents in English shall be obtained from Support
Service Directorate of Awash International Bank S.c located at Awash Towers
10th floor room No 10-02 upon payment of non refundable fee Birr 200.00 /Two
Hundred/ for each LOT during office hours (Monday to Friday 8:00AM-12:00PM;
1:00-4:30PM and Saturday 8:00AM-12:00PM) starting from January 14, 2015
up on presentation of copy of renewed Trade license, Certificate of registration,
Tax Clearance certification, VAT Registration Certificate and TIN Registration
4. Bid must be accompanied by a bid bond amount birrFor LOT-1 50,000.00(Fifty thousand) for group 1
35,000.00 (Thirty five thousand) for group 2
50,000.00 (Fifty Thousand) for group 3
For LOT-2 40,000.00(Forty Thousand) for group 1
100,000.00(One Hundred Thousand) for group 2
100,000.00(One Hundred Thousand) for group 3
For LOT-3 50,000.00(Fifty Thousand) and
For LOT-4 10,000.00(Ten Thousand) in the form of Bank Guarantee or Cash Payment
Order (C.P.O).
5. Bid document must be deposited in the bid box prepared for this purpose on
or before January 29, 2015 10:00 AM for LOT-1, January 30, 2015 10:00 AM for
LOT-2 and February 3, 2015 10:00AM for LOT-3 & LOT-4 in the abovementioned
6. Bid opening shall be held at the office of Support Services Directorate Awash
Tower 10th Floor in the presence of bidders and/or their representatives who
wish to attend on: January 29, 2015, LOT-1at 10:30 AM for Group-1, at 11:00 AM for Group-2
and at 11:30 for Group-3.
January 30, 2015, LOT-2 at 10:30 AM for Group-1, at 11:00 AM for Group-2
and at 11:30 for Group-3
February 3, 2015 10:30AM for LOT-3 & 11:00 AM for LOT-4 in the
abovementioned address.
7. Interested eligible bidders may obtain further information from the office of
Support Service Directorate Tel. 0115-57-11-07/00-84.
8. Failure to comply to any of the conditions from item 2 to 5 above shall entail
automatic rejection.
9. The bank reserves the right to accept or reject the bid either partially or fully.
1. The African Union has allocated funds for procurement of the
above mentioned services, and now invitessealed bids from
eligible bidders.
2. Bidding is open to all eligible bidders who can demonstrate
a minimum of 5 years experience in estimation and cost
planning advice for renovation works and minor maintenance
activities,with proof of sound technical and financial capacity
(evidence to be enclosed).
3. The mandate of the Consultants is to analyse and prepare detail
cost estimation and technical design for projects and activities
with supportive documents for the following projects:
a. Replacement of Elevator in Building A.
b. Construction and installation of tankers and small water
treatment stations.
c. General maintenance of the Congo Hall.
4. Interested bidders may obtain the detailed bid document
on the African Union website:
Clarifications and additional details can be obtained from the
address given above.
5. Bidders are hereby notified that there will be a formal Site Visit
which will take place on Friday 9th January 2015 at 2.30pm.
Interested bidders are requested to be present at the AUC
premises (Reception on 3rd Floor building C) at the scheduled
time where he/she will be escorted to the buildings. This will
be the only Site Visit that will take place; therefore bidders are
advised to participate.
6. The FINANCIAL and TECHNICAL offers must be delivered in
TWO SEPARATE inner envelopes to the address below on or
before 23rd January 2015 at 1530 pm and a public bid opening
on the same day at the African Union Commission premises at
1600 pm in the presence of bidders or bidders’ representatives
who choose to attend, at the address below. Late bids will be
rejected and returned unopened to bidders.
ACTIVITIES” should be addressed to:
The Chairperson,
Tender Board
African Union Commission,
P. O. Box 3243,
Addis Ababa, Ethiopia
Roosevelt Street, 3rd Floor, Building C,
Telephone+251 (0)11-551 7700
Facsimile+251 (0)11-551 0430
P ag e 36
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 37
P ag e 38
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
C on t i n u a t i on
Why Getting Assab . . .
countries Least Developed
Countries (LDCs) and their
inhabitants occupy the
bottom billion tier of the
world's population in terms
of poverty. The sea-borne
trade of the landlocked
countries largely depends
on transit through other
Additional border crossings
and long distances from
the market substantially
increase the total expenses
for the transport services.
Therefore, the economic
performance of landlocked
countries reflects the
direct and indirect impact
of geographical situation
on their key-economic
For example, based on
the 2012 World Economic
Outlook Database, the
average GDP per capita for
the world is about 15,000
dollars. Of the fortyfive world's landlocked
countries, only eight have
GDP per capita that is higher
than this average; and all of
these eight countries are in
The average of all landlocked
countries is only about
13,000 dollars. It may be
noted that even this average
is further distorted by the
inclusion of countries like
Switzerland, Luxemburg and
Lichtenstein, which have
per capita GDP as high as
118,000 dollars. Excepting
Hungary and Kazakhstan
that have 12,736 dollars and
11,774 dollars, respectively,
all of the other landlocked
countries have much smaller
GDP per capita ranging
between Burundi’s 282
dollars and Botswana’s 9,893
Some researchers even argue
that landlocked countries
experience weaker growth
than oceanside countries.
More specifically, controlling
for the effects of other
factors, being landlocked
reduces average growth by
about 1.5pc, and on average,
landlocked countries have
dependence on foreign
assistance much longer than
coastal countries.
Further, similar studies
have reported that, other
factors remaining constant,
landlocked countries that
rely on transoceanic trade
tend to incur a cost of trade
that is twice the amount
incurred by their maritime
neighbors, and experience
six percent less economic
growth compared to their
non-landlocked neighboring
Over all, the landlocked
countries do worse than
their maritime neighbors in
each component of the HDI.
The average GDP per capita
of landlocked countries is
approximately 57pc less that
of their seaside neighbors.
Life expectancy index scores
are 0.3 lower on average,
equivalent to 3.5 years, and
education index scores are
0.36 lower.
Progress in many landlocked
developing countries has
also been slow. In the
Human Development Report,
twenty out of twenty-seven
landlocked countries with
adequate data are considered
‘top priority’ or ‘high priority’
due to their lack of progress
towards the internationally
agreed-upon Millennium
Development Goals (MDGs).
Brining it all closer, according
to the aforementioned Sudan
Tribune report, the Port of
Djibouti is used not only as a
gateway for Ethiopian transit
cargo, but also as a point of
destination. The volume of
Ethiopia’s import and export
cargo has risen from 3.9
million tons in 2006/07 to
4.6 million tons in 2007/08.
With the volume of this
import-export projected to
grow by 20pc in 2009/10,
the total annual fee would
was then projected to be
in excess of 1.2 billion
dollars - a very huge and
unsustainable expense for
a resource-constrained
country like Ethiopia.
It is thus clear that Ethiopia’s
trade flow, as a function
of both the cost of using
alternative sea ports of
other countries and distance
traveled, would stifle any
genuine policy of economic
development. The huge
fees paid out annually to
the coastal countries for
port services are drain the
for food security and
economy of the country,
which is a net importer.
for sustaining economic
prosperity and social and
This is, of course, money that
cultural well-being.
could instead be invested
internally for port service
In the backdrop of these
improvement, infrastructure
unfavorable economic
development and other
realities, to a degree resulting
related transportation
from the landlockedness
projects. The latter in turn
of the country, the ruling
could immensely improve the
party in Ethiopia does not
trade balance and flow of the
appear to be poised to seek a
country by reducing the cost
framework that will address
of exports and imports, and
effectively the loss of the
could increase the aggregate
country’s legitimate access
demand for domestic goods
to the sea. Tragically, our
and services related to the
beloved country still ranked
controlling for the effects as one of the poorest nations
development and
in the world by almost all
of other factors, being measures of economic
port services.
landlocked reduces average development.
The prudent
growth by about 1.5pc The deplorable economic
of the money
condition of the country
paid as port fees could the country has deprived the is expected to continue in
also necessitate increased people of other economic this hapless path as long
employment of labor and opportunities. Most notably, as it remains landlocked
other resources to meet the the loss of access to the sea a n d a m e a n i n g f u l a n d
accompanying increased was accompanied by the balanced policy of economic
d e m a n d . W i t h a v e r y loss of maritime resources, development cannot be
conservative estimate of including fisheries, as implemented through good
95pc increased consumption means of food security, and governance. Therefore, it is
spending (which entails a revenues from tourism. In a of paramount importance
0.95 marginal propensities to country like Ethiopia that has to revisit the adverse impact
consume) for any amount of
experienced vicious cycles of being landlocked on the Eidmon Tesfaye has
additional income Ethiopians
economy of Ethiopia.
a Master ’s Degree in
get on the average, one would of famine and drought, it
There is mounting evidence Agricultural Economics &
have a corresponding large
significance of healthy fish that the bogus international Rural Development. This
spending multiplier of 20.
stock as a critical alternative treaties that the people of [email protected]
This implies that the total
fees lost in the form of direct
payment for the use of the
port of Djibouti could add
billions of dollars to the
GDP of Ethiopia annually.
Evidently, the unnecessary
leakage in the national
revenue reduces the value
of export, and increases
the cost of imports, thereby
shrinking the volume of
Open Tender NO. DB/011/OT/2014/15
the GDP and depressing
the economic growth and
1. Dashen Bank invites all interested bidders for the supply of the following
development prospects of
listed items for 2014/15 fiscal year.
Ethiopia for years to come.
In addition, the
Sinarline, Mirage, Multi Office,
landlockedness imposed on
1 Photocopy paper Pkt
13,944 Lucky boss, Double A, Nopa or
substantially equivalent.
(Cont'd from PAGE 34)
2. Interested and eligible bidders are invited to purchase the bid document
starting January 12, 2015 from Logistics & Property Management
of their agricultural policy
actions, something deeper
Department, Beklobet Adjacent to Garad Building 4th Floor, having paid
trade integration can only
a non-refundable fee of Birr 300 at Dashen Main Bank account Number
180020002 & present copy of credit advice ticket during the office hours
Despite the wave of trade
(Monday to Friday 8:00-12:00 AM, 1:00-5:00 PM and Saturday 8:00and market liberalisation
12:00 AM).
that has swept world trade
3. Copy of renewed Trade License, VAT Registration Certificate and TIN
since the 1980s, food
Certificate are required while submitting the bid document.
commodity markets often
4. 2% of the offer shall be presented as a bid bond through Bank Guarantee
remain highly distorted as
or Cash Payment Order (CPO).
a result of the misuse of
certain trade policies. As the
5. Bidders shall clearly specify the type of photocopy paper in their offer.
new book shows, this can
6. The sealed bid document shall be placed in the box prepared for this
cause many governments to
purpose on or before January 23, 2014, 5:00 PM at the place mentioned
often inadvertently aggravate
under No. 2 above.
agricultural price woes.
7. Failure to comply to any of the conditions stated above from No. 2 to 5
Fortunately, the effect of price
changes on food insecurity
shall result in automatic rejection.
in developing countries
8. The Bank reserves the right to accept or reject the bid either partially or
can be mitigated through
appropriate, better informed,
NB. 1. For any information you can contact with Tel No. 011 466 45 44
and more outward-oriented
integration policies.
extension 137, 138, 139.
Food Prices . . .
playing field in terms of
food accessibility and
availability by both ensuring
that governments retain
policy choices to support
their agricultural sectors
while also limiting the scope
for countries to implement
destabilizing policies
abroad. It is important to
continue to apply these
existing WTO disciplines,
but more needs to be done,
particularly by reducing the
scope for trade-distorting
support, increasing market
access, and strengthening
disciplines in areas such as
export competition.
Above all, governments
must become more adept
at understanding the
international repercussions
(Cont'd from PAGE 23)
Ethiopia have been forced
to accept have no binding
force from a legal, historical
or economic standpoint.
It is, therefore, incumbent
upon the international
community and the peoples
of the concerned countries
to seek a lasting solution to
the problem that has been
an impediment to peace
and prosperity in that part
of Africa.
In the search for a viable
solution, I believe, it is
critical that the pros and
cons of all available options
be explored, taking into
account the historical,
socioeconomic and national
security imperatives in the
region. Such a methodical
and unbiased approach to
the issue is guaranteed to
lead to an incontrovertible
solution that will affirm the
unconditional and rightful
return of the port of Assab to
Ethiopia, thereby heralding
a new era of peace, stability
and prosperity for the
brotherly peoples of Ethiopia
and Eritrea whose common
heritage is much more deeprooted than the shortsighted
machinations of politicians
that purport to divide them.
A nno u nce m en t
ዳሽን ባንክ
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 39
Independent News & Media Plc
He or she must be able to supervise and train reporters, handle
the pressure of daily deadlines, and lead by example with truly
top-notch writing and reporting skills. Applicants must have the
ability to develop excellent sources and produce groundbreaking
stories about the business sector, together with the reporters they
work with. The successful candidate must be a self-starter with
the ability to react to and cover breaking news and also identify
trends and write features in numerous business arenas. The ideal
candidate for this position will possess a working knowledge of
both public and business sectors and have the ability to write daily
reports and edit, if necessary, weekly news stories for and about
the economies of Ethiopia and other countries in the region. The
work requires the ability to file weekly story budgets and give
editors advance notices of stories in progress. The ideal candidate
will have excellent organisational skills and the ability to meet strict
deadlines and work in a fast paced entrepreneurial environment.
Three to five years of experience in writing for newsletters or
economic journals or working in a media environment is preferred
but not required.
We are searching for a candidate who is a graduate of Economics,
Management, or Finance from recognised universities. The ideal
candidate should handle the pressure of daily deadlines, not to be
intimidated by workload pressure and stress, and have exceptional
data analysis and interpretational skills. Applicants must have the
ability to easily locate and interpret raw data about the economic
and business sectors.
The candidate must have a deeper understanding of web-based
systems and be experienced with dynamic web based solutions
Skill sets required:
HTML 5, CSS3, JS, JQUERY, Angular Js, UI frameworks like
Twitter Bootstrap, TopCoat and Zurb Foundation. PHP, LARAVEL
The candidate must also have working experience with web
development toolsets including Eclipse, Sublime, AWS and Git
Version Control System.
It is absolutely essential that candidates enjoy working on multiple
assignments, in a high-energy environment, and have the ability
to collaborate with other members of the editorial team. All of the
positions are in Addis Abeba. Successful applicants will be paid an
attractive salary and be provided with other benefits. Please submit
your applications, attached with relevant testimonials, to:
Independent News & Media Plc
Tegene Building, 7th Floor.
Next to Global Hotel on Sierra Leone Street (Debre Zeit Road)
Tel: 251-11-416-3020 Fax: 251-11-416-3039
P.O. Box: 259, Code 1110, Addis Abeba, Ethiopia
The United Nations Children's Fund (UNICEF) intends to construct
primary school(s) and child friendly spaces in Gambela region
refugee camps and hosting communities located in Lare and
Itang weredas with selected 'pre-qualified' General/Building
Contractor(s) of Grade-5 and above who will be invited to submit
Offers for building construction contracts.
To respond to this EOI, all interested General/Building contractors
are requested to submit by email a Letter in English expressing their
interest for registration and evaluation. Interested General/Building
contractors of Grade-5 and above will be required to submit a
detailed Questionnaire form filled for pre-qualification review.
The Questionnaires for construction contractor can be obtained by
directly contacting Mr. Sebastian Muzuma at [email protected]
org and/or Mr. Yonas Mindaye at [email protected] All
requests for EOI must be submitted with full Contractor’s name
and contact addresses.
The contractors will be assessed and qualified for registration
based on the completeness of submission of valid documents for
the criteria required as listed below and in the Questionnaires:
Construction Experiences & References (include details of
similar projects, value of completed work, etc)
Individual assessment (include financial status/review);
Staff Qualification and Experience (include resumes of key
Organizational Structure
Standard Strategy and Methodology
Quality Control Program
Safety Policy Statement/ Record
Membership Affiliation:
Well-established companies with excellent construction capacities
and experience with reputable clients are encouraged to register
as potential construction contractors.
A limited number of contractors will be short-listed for evaluation.
Contractors with positive evaluations will be invited to participate
in Construction Bid. Other contractors, depending upon the desk
assessment, will also be retained for inclusion in appropriate and
relative tenders.
UNICEF fully reserves the right to accept or reject registration.
Filled Questionnaires and supporting documents must be submitted
in both hard copy and soft copy no later than 16th January 2015
at 2:00 p.m.
Soft copy submission can be by e-mail copy as MS Word or PDF
files to Mr. Sebastian Muzuma at [email protected] and/or
Mr. Yonas Mindaye at [email protected]
Hard copy submission of questionnaires and supporting documents
can be submitted in any of the two locations provided below:
1. UNICEF, ICC Ware House, Debrezeit Road, Lancia. In front of
Concord Hotel, next to Action Aid, approximately 300 meters
from the main road. You may call Phone No +251 114660848
for directions.
2. UNECA Compound, NOF Building #20, UNICEF Ethiopia,
Supply Section, 2nd Floor, east wing.
The UNECA security rules requires 36 hours ‘advance notice’ to
be given by visitor, therefore please notify the Supply Section by
email: [email protected] providing the full name
of the person who will be submitting the EOI and proposed date
of arrival.
P ag e 40
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
Documents Authentication and
Registration Office (DARO) expands
its offices in Addis Abeba to 11 by
opening a new office at CMC area
starting from December 2014.
The 10 branches in Addis Ababa
are located at Mexico, Lanchia,
Megenagna, Ameste Kilo, Gullile,
Kaliti, Ayer Tena, Bambis, Nifas Silke
Lafto, and Lideta and the new is
located at CMC. It has one office at
Dire Dawa.
Established back in 1970 and
restructured as DARO in 2003, it
became the sole provider of a widerange of notary services through
authentication and registration,
providing a direct public service for
more than one million customers
through its branches.
During the last fiscal year, the office
provided services to 1,099,039
clients, which is 109pc and handled
526,633 cases above the target, which
was 1,005,200 clients. In the last
fiscal year, the Office had also planned
to collect over 160 million Birr but
managed to collect over 171 million
Birr, which is seven percent above
the projection.
On the event organized by Dire Tube Media Group at Sheraton Addis on January 5, 2015 Mulatu Astatke, the father of
Ethio-Jazz and a legendary musician was honored for his achievement in introducing Ethiopian music internationally. Mulatu
is seen in the picture receiving an award from Sewnet Bishaw the former coach of the Ethiopian National Football Team,
for his effort in introducing the Ethiopian version of Jazz to the world on the event. In addition to Multu, 10 additional
awards were given to nominees from the media and entertainment industries.
Street Art
Photo by: Samuel Habtab
Second Ethiopian
Roadshow Due
An art enthusiastic Bruk Bagresh, who washes cars for living, spend his spare time by collecting stones to build them
as his vision guides him from ancient Ethiopian civilization mark-Axum Obelisk to the ancient Egyptian Pyramid. He
always puts the stones and restructures the form as he is seen in the picture in different designs including houses on
his work area which is located next to Friendship Hotel off of Africa Avenue.
Like Master, Like
Photo by: Samuel Habtab
Overseas Infrastructure Alliance
(OIA), an Indian-based infrastructure
developer, is to host the second
“Invest in Ethiopia” Roadshow in
February, 2015. The roadshow, a
collaborative effort of the OIA and the
Ethiopian government, is targeted at
showcasing the nation as a favourable
investment destination and will be held
in Ethiopia. It is said that the show is a
continuation of the first roadshow that
was conducted in three cities - Pune,
Bengaluru and Chennai - of India.
The first roadshow was a collaborative
effort of the OIA, Dun & Bradstreet, a
global business information company,
and the Ethiopian Embassy in India.
With the three cities being the major
industrial bases of India, hosting
textile and leather manufacturing
industries, the first roadshow was
targeted at garnering Indian investment
to Ethiopia. Current data shows that
there are over 600 Indian companies
that have invested in Ethiopia.
The latest show, whose details are yet
to be produced, is targeted to show
the reality in the ground. The plan,
according to executives of OIA, is
to highlight the achievements of the
nation, its ambitions and all available
investment opportunities. As a followup to the roadshow, there is also a
plan to bring two teams of Indian
investors, with each team constituting
15 investors, to Ethiopia, according to
the executives. The visit, temporarily
planned to happen in March 2015,
is said to be aimed at giving Indian
investors the real time experience
of the investment opportunities in
OIA is an infrastructure development
company with expertise in energy,
agro-based industry solutions, low
cost housing, water management,
healthcares, transportation
infrastructure and advisory services.
p ag e 41
Research Suggests CSOs to
Source Finances Domestically
Mark of Respect
Photo by: Samuel Habtab
DARO Opens
Eleventh Branch at
R a d a r
On the part of the 31Km long Light Rail Transit (LRT), which is located around Atklet Tera, a street boy and his dog seem
to be in high spirits as the boy teachesthe dog how to stand on two legs. Since the commencement of the project in 2011,
the LRT was initially planned to begin service by the beginning of January 2015 but it is rescheduled for February, 2015,
and some of the rails such as the over located at Atkilt tera are free for fun activities for the street boy and his dog.
A research by an individual named
Gebre Yntiso (PhD) suggests civil society
organizations (CSOs) in Ethiopia should
avail their finances domestically.
The researcher presented his research
entitled CSOs & Development in Ethiopia:
Contributions, Innovation and Challenge,
at the public dialogue that was held by
Forum for Social Studies (FSS) on the
role of civil society organizations (CSOs)
in poverty reduction on January 9, 2015
at Ghion Hotel.
CSOs which became operational in
1950s, with numbers less than 20,
reached 3,007 in 2014 among 31pc of
are engaged with children and women
affairs, 19pc in health, 13pc in education,
11pc in agriculture, 13pc in integrated
developmental activities, five percent in
water and sanitation programs, three
percent in environment and five percent
in other activities.
The research also highlighted problems
faced by the organizations including
low participation in policy dialogue,
dependency on foreign fund, lack
of cooperation among them and
government regulation.
Japan to Support Nation’s
Industry through Kiezen
Phase three Kaizen project is expected
to be launched with the support of Japan
International Cooperation Agency (JICA)
by the beginning of 2015.
The project expected be last until 2020,
will contribute to strengthening industrial
competitiveness to the country, according
to Jim Kimiaki, chief representative of JICA
Ethiopia Office during a press conference
held on January 8, 2015 at its office off of
Ethio-China Avenue.
JICA provides bilateral aid in the form
of Technical Cooperation, according
to the chief representative. It has been
providing monetary and technical support
to Ethiopia since the Hailesilasie regime.
Currently JICA, is engaged in agricultural
and rural, private sector & industrial and
infrastructure development.
JICA has been providing technical
assistance on Kaizen promotion in
Ethiopia since October 2009. Ministry
of Industry was the counterpart in Phase
one and Ethiopian Kaizen Institute (EKI)
was established for Phase two. During the
last fiacal year, the agecny trained 20,957
trainees rising from 11,996 are trainees
in 2012/13 fiscal year.
Life Fitness Launches
first Fitness Center
Life Fitness, a US based company, launches
a fitness center on January 9, 2014 at
CMC area Meri Loki are close to sunshine
The new fitness center has five new
gymnasium equipments with recent model
including digital counting instrument of
muscle exercise. The equipments are
ready for commercial and household
purposes, following the inauguration
"With the growing economy of the world,
people are enjoying diets, but this has to
be balanced and life fitness works to make
the world a better place," stated Frank Van
de Ven, the vice president of life fitness’s
international business unit during the
launching ceremony.
"The newly launched equipments will
have an immense benefit to Athletes and
the community as a whole," stated Eyob
Bekele, manager of Bekele Abeshero
Plc, Life fitness’s exclusive agent and
distributor in Ethiopia for the last ten
Life Fitness distributes gymnasium
equipments for over 120 countries of the
world including Ethiopia.
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 42
Syndication articles from
The Financial Times [2013]. All Rights Reserved. Not to be redistributed copied or modified in anyway.(The client) is solely responsible for providing this translated content and the Financial Times Limited does not accept any Liability for the accuracy or quality of the translation.
By Robin Wigglesworth,
he global financial crisis left many
developed and emerging economies
heavily indebted, with austerity
programmes often hindering growth. But
there are ways policy makers can help to
repair the damage.
Jorge Grave’s future looked bright when he
in 2006 graduated with a degree in physical
education from the Technical University of
Lisbon. But then the eurozone crisis erupted,
and sucked Portugal’s economy down the
To save money in the resulting austerity
drive, school classes were swelled and Mr
Grave’s hours as a gym teacher in his native
Setúbal were cut to just one a day. Unable to
survive on such a pittance, he was forced to
quit and set up a personal training business,
while many of his former colleagues continue
to eke out a living from teaching - or have had
to leave education altogether.
“I can’t complain, but I have friends who
I’ve worked with who have nothing,” he says.
“Most of them only work five to 10 hours a
week, that’s not enough to start a family, or
even leave their parents’ place.”
Portugal limped out of its bailout programme
last year, but the economic scars of the crisis
are still raw. The widely-watched debt to gross
domestic product ratio remains at almost 130
per cent, one of the highest rates in the world.
Although borrowing costs have fallen the
country now spends more money on simply
servicing its debts than on its entire education
budget, taking a heavy toll on teachers like
Mr Grave.
The government has fought hard to restore
its credibility with investors, but some
economists fret that the country’s debts remain
unsustainably high. Portugal’s predicament is
a vivid example of a longstanding conundrum
of economics: when is a country bankrupt? At
what point are a government’s debts simply
too great to bear?
Unlike for companies, there is no clean
answer for countries. Yet rarely before has the
question been more pressing, in states from
Ukraine to Venezuela, from Jamaica to Ghana
and not least in Europe, where a clutch of
countries still labour under staggeringly high
debt burdens even as the crisis recedes.
Despite the biggest restructuring in history
in 2012, Greece’s debts are still at about 174
per cent of GDP, a fact that has helped the
radical left Syriza party ride high in the polls
on a platform of “debt forgiveness” from the
country’s lenders ahead of elections later this
“Clearly a lot of euro countries are at or
close to danger thresholds,” says Peter Doyle,
a former IMF official who left in disgust over
the handling of the crisis in 2012. “There is a
major, unresolved debt problem.
Together with the IMF, the Financial Times
has designed an online, interactive tool
based on the fund’s economic model that
calculates a country’s debt trajectory and how
it is affected by an array of factors such as
economic growth, borrowing costs and public
belt-tightening. Assumptions can be tweaked
to see how debts can be tamed, or increased.
But it cannot determine exactly when a country
is bankrupt.
Walter Wriston, the former chairman of
Citigroup, once said “countries don’t go
bust”. In some respects the banker was right,
countries do not go out of business and
disappear like companies do. Yet history is
littered with examples of governments directly
or indirectly reneging on their debts.
Economists Michael Tomz and Mark Wright
have examined the history of 176 countries
from 1820 to 2013, and counted 248 defaults
on foreign debts by 107 countries. Although
some were repeat state bankruptcies, few
countries have an unblemished history. As
Adam Smith wrote in the Wealth of Nations
in 1776: “When national debts have once
A world of debt
been accumulated to a certain degree, there
is scarce, I believe, a single instance of their
having been fairly and completely paid.”
There are reasons to fear that Smith’s
observation might still hold true. The gross
government debts of developed countries now
stand at an average of 108 per cent of GDP,
according to the latest Geneva Report written
by a panel of senior economists.
Hardly anyone spends more time squinting
at the financial ledgers of governments and
calculating their sustainability than the staff
of the IMF. But even its experts admit it is, at
best, a rough science. They operate with a rule
of thumb that developed countries should try
to keep their debts below 85 per cent of GDP,
while emerging economies should aim to stay
below 70 per cent.
This is corroborated by a considerable body
of academic research. In This Time Is Different,
the account of humankind’s lamentable
confidence in thinking that financial crises are
a thing of the past, professors Carmen Reinhart
and Kenneth Rogoff calculated that the average
external debt-to-GDP ratio of countries that
defaulted in 1970-2008 was just 69.3 per cent.
This ratio does not include local debts.
These have proven less problematic as
governments can simply print the money they
need to service these liabilities, often leading
to inflation but not a direct, “hard” default.
Escape routes
Even without debasing the currency, local
debts are usually less susceptible to crises, as
domestic savers and investors are more willing
to fund their government than foreign investors
in times of distress. In extreme situations, local
savers and investors can be cajoled or forced
to do so through regulation, a phenomenon
known as “financial repression”. The large
pool of local savings is one of the reasons why
developed countries such as Japan can typically
carry bigger debt burdens than emerging
economies without buckling.
The FT-IMF interactive model for debt
sustainability therefore allows users to tweak
the mix of local and foreign debts to see how
it can affect a country’s vulnerability, as well
as growth, interest rates, currency shocks,
the primary budget balance (before interest
payments) and borrowing costs. Yet these
numbers are only a guide to determining when
countries are flirting with disaster, says Reza
Baqir, head of the IMF’s debt division.
“A key element in assessing sustainability is
not just the level of debt but also the structure
of debt,” he says. “You could have a situation
where the debt level per se doesn’t look too
high, but most of it is short-term and has to be
rolled over at a difficult time, which could be
a significant risk.”
Moreover, history has shown that looking
purely at government debts can be misleading.
Nominally private debts have a nasty way of
becoming public liabilities in severe crises
- especially when bloated banking sectors
implode and governments feel compelled to
bail them out, as happened in Ireland and
Spain in the eurozone crisis.
Some economists fear the next noxious
examples of this phenomenon could crop up in
the developing world. While the recent Geneva
Report estimated that emerging economies
only have an average gross government debtto-GDP ratio of 48 per cent, add in the private
sector and the total climbs to 151 per cent even excluding the debts of their banks - and
rising fast.
2014 government debt as a percentage of GDP
Low government debts,
but slowing rates of growth
are causing concerns to
policy makers
W a r - t o r n a n d
increasingly shaky, with
the IMF identifying a $15bn
shortfall in the country’s
Debts still high despite
coalition government’s
austerity programme
Finally turning the
corner, having recorded
5 per cent growth in the
third quarter, but finances
remain sore
Nursing the wounds
of the eurozone crisis
despite exiting bailout
programme last May
U n a b l e t o g r o w
and debts continue to
mount for Matteo Renzi’s
Still struggling despite
debt restructuring. Crucial
election later this month
T h e w o r l d ’s m o st
indebted country after its
crash in the 1990s
Despite falling
borrowing costs, the
debts of countries
such as Greece,
Portugal, Spain and
Italy continue to
Spectre of default
Defaulting is almost always a political
decision. Some countries are able and willing
to credibly impose draconian spending cuts
and tax rises to repay their debts no matter
what the impact on the economy, while others
would rather default as soon as a crisis bites.
The decision may make little conventional
sense. Nicolae Ceausescu’s determination
to repay in full and on time $9bn owed by
Bucharest to foreign banks in the 1980s forced
many Romanians to go through winters with
little or no heat, and factories to partly shut
down to conserve electricity. On the other
side of the spectrum, Ecuador controversially
decided that some of its foreign debts were
“illegitimate” and defaulted in 2008, despite
the absence of any severe stresses.
Prof Rogoff says there are likely to be
“multiple equilibria” points for dangerous debt
levels. “In the canonical model, if a country’s
fundamentals are sufficiently strong, it is at
no risk of debt crisis, and if the fundamentals
are sufficiently weak, it is certain to happen,”
he says. “But there is a large grey area in the
middle where a country is vulnerable to crises,
but they need never happen.”
Growth - the simplest solution to excessive
debts - cannot be conjured up by magic, and
often proves stubbornly elusive when it is
needed most. But some countries have pulled
off improbable escapes.
Turkey, for example, looked doomed to
default in the early 2000s. Every IMF warning
light was flashing red, and at one point in 2001
a debt auction resulted in an annual interest
cost of 130 per cent, recalls Kemal Dervis, the
then economy minister. “You’re not very happy
on days like that,” he says.
Thanks to some nimble footwork by Mr
Dervis, a massive bailout from the IMF and
a flurry of previously stalled reforms, Ankara
managed to pull back from the brink. Within
a few years the economy regained its vim and
embarked on a long period of expansion. But
the former minister, now at the Brookings
Institution, admits that the buoyant global
economy of the early noughties was a big boon
for Turkey’s recovery, a fillip few countries can
count on today, especially in the eurozone.
Despite falling borrowing costs, the debts
of countries such as Greece, Portugal, Spain
and Italy continue to mount, with the burden
eating into ever more revenues at the cost of
public services.
For now, investors have faith in eurozone
bonds again, but voters may eventually rebel
at seeing creditors claim an increasing share
of the public purse. Greek voters will have a
chance to do so in elections later this month.
No one has worked with as many countries
in distress as Lee Buchheit, the lawyer
virtually every government turns to for advice
on restructuring debt when the money runs
out. He says the one common factor in every
country he has worked for is initial denial.
“They all realised far too late the extent of
their problems,” he says. “And when they did it
was too late to arrange an orderly readjustment
of the debts.”
Periphery’s burdens stretch into ‘soft
Sovereign debt sustainability has typically
been an issue for emerging markets, but
economists are training their eyes on the
heavily-indebted countries on Europe’s
Borrowing costs have slumped to multiyear
or record lows after Mario Draghi, the
European Central Bank governor, promised
to do “whatever it takes” to keep the currency
bloc intact. Yet with inflation extremely
subdued and growth anaemic at best, there
are mounting concerns that the periphery’s
debts are simply unsustainable. Almost 10
(Continued on PAGE 44)
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 43
Syndication articles from
Europe: Deflation decoded
The Financial Times [2013]. All Rights Reserved. Not to be redistributed copied or modified in anyway.(The client) is solely responsible for providing this translated content and the Financial Times Limited does not accept any Liability for the accuracy or quality of the translation.
By Ferdinando Giugliano,
he spectre of deflation descended over
the global economy this week as the
eurozone recorded falling prices for the
first time in more than five years, raising fears
that the world could enter a vicious circle of
sliding incomes and spending.
Prices in the eurozone dropped by 0.2 per
cent in the year to December, following a 50
per cent drop in oil prices since June. While
many economists had seen this coming in
the currency union, there are now fears that
deflation could spread. With oil prices at $50
a barrel, at least 18 states - including Germany
and the UK - could see negative inflation,
according to estimates by Oxford Economics.
Deflation fears rattled the stock market,
with global shares plunging on Monday
before paring back their losses. Investors
know that once an economy falls into outright
deflation - a persistent and generalised fall in
prices - it is very difficult to climb out. This
is what happened in Japan, where policy
makers have struggled to lift prices since
1999. But while Japan offers a cautionary
tale, it does not have to be that way.
Japan is an example of "bad" deflation,
where prices fall as a result of slowing
demand. As consumers expect goods to
become cheaper in the future, they postpone
purchases, worsening the slump. If price
levels keep sliding, nominal incomes may
start to fall, making it much harder to service
debt. A wave of bankruptcies can follow,
compounding the misery.
But there is also a rosier deflation
scenario. Falling prices can be the result of
better productivity, as workers create goods
and services at a lower cost. Sliding import
costs can also have a positive effect, boosting
disposable income.
This happened in West Germany in 1986,
when consumer prices dropped by up to 1
per cent as oil prices fell, but output over the
next three years grew by a healthy average of
2.9 per cent.
The question for investors and politicians
is which of these two scenarios the world
economy is in. For now, the drop in prices
appears to resemble the experience of the late
1980s more than the Depression years of the
1930s. Inflation has been largely driven down
by the cost of energy, while core inflation which strips the effect of goods with more
volatile prices - has generally held up.
Nor is there much evidence that consumers
are delaying purchases in the expectation that
prices will keep falling. Retail sales growth
across advanced economies rose by about 2
per cent in the year to November, according
to estimates by Capital Economics.
In fact, so long as the price decline
remains limited to energy, there is little
reason to believe this change in psychology
will happen. "Why should a consumer look at
a lower oil price and say 'the cost of filling the
family SUV with gasoline has gone down, I had
better not buy that flat screen TV that I want,
because it will be cheaper next month?'," said
Paul Donovan, a UBS economist.
And despite falling inflation, experts at the
World Bank and the International Monetary
Fund still expect global growth to be faster in
the coming year thanks to lower oil prices.
There is a big exception to the rosy
scenario, however: the eurozone and, in
particular, its more troubled "periphery"
countries such as Greece and Spain. A
survey of inflation expectations carried out
in December for the European Commission
shows buyers expected prices to be flat over
the next year.
These worries will be weighing on the
European Central Bank when it meets on
January 22. Many analysts say the ECB
will have no choice but to embark on a
sovereign bond-buying programme in hopes
of boosting inflation.
"The pressure remains firmly on the
ECB to deliver a sizeable quantitative easing
programme at its meeting later this month
to prevent deflation from becoming firmly
entrenched," said Jessica Hinds of Capital
Central bankers in the US, the UK and
elsewhere have fewer reasons to worry for
now. But they will be watching prices like
Consumers: Blessing or a curse
A short bout of deflation can be a blessing
for consumers, especially when it is driven
by a slide in the price of oil or another
imported necessity. Households find that their
paycheques go further. And lower prices also
mean that indebted households have more
money to pay off what they owe.
But a protracted period of deflation will
have a different effect on shoppers' behaviour.
Knowing that all goods will be cheaper
tomorrow than today, they will postpone their
purchases. This has a pernicious effect on
businesses, which face a slump in demand
and a squeeze in profits.
The financial troubles of companies are
bound to have an impact on households.
Some will face the prospect of lay-offs or pay
cuts, reducing their disposable income and
hurting consumption. Even those who are
spared will face greater uncertainty and may
save more of their income, further weighing
on demand. Finally, indebted workers will
find it harder to pay back their debt, which
is rising in real terms as wages remain
stagnant or fall.
A protracted period of low prices makes
it more likely that workers will not ask
for higher wages when they bargain with
employers. In fact, they may be perfectly
content to accept a stagnant salary, as this
would still increase their purchasing power
in the face of sliding prices. This effect on
wage negotiation is one of the reasons it is so
hard to leave a prolonged period of deflation.
Shinzo Abe, Japan's prime minister,
has urged companies to pay more to their
workers, as he sees bargaining rounds as a
key battleground in his fight against deflation.
But so far, wage growth is still sluggish.
Companies: Winners and losers
The impact of deflation on businesses
depends on how the price of their products
moves relative to the cost of inputs needed
to make them.
The recent plunge in crude prices helps
despite falling inflation,
experts at the World Bank and
the International Monetary
Fund still expect global growth
to be faster
to explain how this works.
Businesses whose costs are heavily
dependent on the price of oil, such as
airlines, have enjoyed a bumper few months.
In December, analysts at Barclays estimated
that the US aviation industry could see their
costs drop by $10bn. This will translate into
fatter profit margins.
Conversely, oil majors are suffering from
a significant squeeze in their profits, as the
value of their output falls, while their input
prices are roughly unchanged.
Not all corporations are equally vulnerable:
relative financial strength depends on factors
such as debt levels or the strength of cash
flow. Investment prospects, however, can be
hit severely, though this depends on future oil
prices rather than on current ones.
In a scenario of generalised deflation,
however, all companies face a tricky
balancing act. With output prices falling,
managers will have to take the axe to their
costs to preserve profit margins. This means
cutting workers' pay, for example.
However, economists generally think of
wages as "sticky downwards": meaning it
can be hard to impose nominal cuts to the
value of a worker's pay. This means they have
to cut jobs, worsening the slump by raising
Full-blown deflation will also put the
stability of the financial sector at risk. In
theory, falling prices help creditors, who see
the real value of their loans rise.
But, a prolonged period of stagnation
could lead to a wave of bankruptcies, which
will hit the banks' balance sheets. Lenders
will also suffer from any fall in asset prices,
which will reduce the value of any collateral
they hold.
Markets: Watch the ripple effects
Deflation has profound consequences
for financial markets. The initial effects are
clear-cut, but the secondary responses are
far harder to predict.
In a deflationary environment, the biggest
winners are conventional fixed-income
bonds. They pay a coupon whose value will
rise over time if deflation persists. The biggest
losers are index-linked bonds.
Beyond the bond market, cash grows
more popular, even when it pays virtually
Worst year for commodities since 2008
By Neil Hume
rice falls and liquidations trigger $50bn
decline in assets under management
Last year will go down as one of the most
difficult years for commodity investments,
according to Barclays, which says steep price
falls and liquidations triggered a $50bn decline
in assets under management.
Commodities recorded their biggest annual loss
since the global financial crisis in 2008 with the
spot Bloomberg Commodity index, which tracks
22 products including oil and copper, falling
almost 17 per cent per cent to its lowest level
in five and a half years.
Rising supply and slowing demand growth hit
oil prices - Brent fell almost 50 per cent last
year - while a bumper harvest in the US, the
largest agricultural exporter, put pressure on
grain. Copper fell on concerns about rising
supplies and weaker growth in China.
Others factors were a stronger US dollar and
negative roll yields, where investors replace
expiring futures contracts with more expensive
later-dated ones.
The figures are likely to add to widespread
recorded their biggest
annual loss since the
global financial crisis
in 2008
investor disaffection with commodities, which
have promised much and delivered little since
they became a distinct asset class in the early
Barclays said steep declines in the price of
several commodities in the second half of the
year, in particular crude, saw total commodity
assets under management decline to $276bn in
November, the lowest level since early 2010.
“Given the further steep decline in underlying
asset values in December, we expect the decline
in AUM for 2014 as a whole to likely top $50bn,”
said analyst Kevin Norrish. The decline in AUM
last year was an improvement on the $100bn
decline in 2013. But Mr Norrish said 90 per
cent of the fall was a result of investors selling
out of gold-backed exchange traded funds after
the gold price collapsed.
“The main factor driving AUM lower in 2014
was the liquidation of broad-based commodity
index investments and price declines in several
of the more important index commodities,
including oil,” he said.
Withdrawals from commodity index-linked
investments totalled $18bn between January and
November, almost $10bn more than in 2013,
said Barclays. Negative roll yields had worsened
into the year end, adding to losses from falling
prices, added Mr Norrish.
When Hermes Investment Management
announced it was exiting the sector late last year,
the UK fund manager said investors increasingly
saw commodities as a “tactical diversification
play”, best held passively rather than by hiring
a manager to beat the market.
However, several banks say the strategies best
suited to the current environment are ones that
have the ability to pick commodities and take
long and short positions and trade different
parts of the futures curve.
The data collected by Barclays show the strong
performance of funds that use computer
programs to follow trends, known as managed
futures funds or commodity trading advisers.
Long and short strategies based on trend
following and value-seeking algorithms
registered gains of 17.9 per cent and 6.2 per
cent respectively in 2014, according to the
Mr Norrish said: “These trends are accelerating
the uptake of more sophisticated products.”
zero interest, because it will grow in value
with deflation. Financial engineers would
likely redouble their efforts to find ways to
guarantee returns. Commodity prices fall,
by definition.
As for equities, deflation implies a lack
of corporate pricing power and a lack of
growth - both bad for stock markets. But
David Bowers of London's Absolute Strategy
Research points out that money will flow
to companies that can make themselves
as bond-like as possible. They can do this
by paying out more cash in dividends, or
by buying back their own stock. As he
puts it, "companies are incentivised to run
themselves for cash".
This leads to the potential second-order
effects. If companies have an incentive to pay
out cash, they tend to spend less on capital
investments - which weakens economic
Companies appear to have already started
adapting. For the 12 months to the end of
September, Howard Silverblatt of Standard
& Poor's found that S&P 500 companies
spent $902bn on buybacks and dividends
combined - an increase of 20 per cent
compared with a year earlier.
This far outstrips the growth in their
earnings or revenues. And it was also 5.5
times the $164.7bn they devoted to capital
The late 1990s equity market led to wild
over-investment by companies, particularly
in the US. The fear now is that deflation
would prompt markets into forcing underinvestment, as companies tried to make their
stocks look like bonds. John Authers
Central banks: Eye on the target
Over the past two decades, many central
banks around the world have adopted
inflation targets, meaning their decision to cut
or raise interest rates depends on how indices
of prices are moving. Their key measure is
typically "headline" inflation, which includes
all goods and services. As a result, sharp
drops in the cost of volatile products, such
as oil, can lead to steep deviations from a
central bank's target.
Policy makers try to ignore such swings
and concentrate on "core inflation", a
measure that excludes volatile energy and
food prices. And since central bankers
are normally interested in maintaining
price stability over the medium term, this
allows them to avoid knee-jerk reactions to
temporary swings.
The risk for the monetary authorities,
however, is that even a temporary bout of
deflation can alter consumers' expectations,
changing their spending behaviour and the
wages they demand from their employers.
At that stage, it becomes very hard for the
central bank to lift inflation back to its target:
the Bank of Japan has kept interest rates
near zero for the past 15 years, but this has
largely failed to prompt a sustained rise in
the price level.
In an environment of persistent deflation,
monetary policy makers face an uphill battle.
Central bankers stimulate the economy by
reducing the so-called real interest rate, a way
of encouraging households and companies to
invest instead of save. When prices are falling,
nominal interest rates must be pushed to
extremely low levels to boost output.
But sometimes even this is not enough.
When demand is extremely weak, central
bankers need to slash nominal interest
rates below zero to give enough of a boost
to demand. But this is impossible, as savers
would take their money out of the bank.
Central bankers then have to implement
unorthodox measures, which could include
quantitative easing.
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 44
Syndication articles from
Perpetual cash machines
The Financial Times [2013]. All Rights Reserved. Not to be redistributed copied or modified in anyway.(The client) is solely responsible for providing this translated content and the Financial Times Limited does not accept any Liability for the accuracy or quality of the translation.
Six routes to securing ‘permanent capital’
As they face rising
pressure to justify their
fees, private equity and
hedge fund bosses are
seeking a new holy grail:
a never-ending supply of
cash to invest By Henny
Sender and Stephen
In 2009, Bill Ackman surveyed the wreckage of
the US property market and spotted a golden
opportunity. General Growth Properties, owner
of shopping malls in 40 American states, was
teetering on the verge of bankruptcy - and Mr
Ackman, founder of the Pershing Square hedge
fund, sensed it was time to buy.
There was just one problem: his own investors.
Spooked by the financial and economic crisis
spreading around them, many Pershing clients
were asking for their money back. To cope with
the flood of redemption requests, Mr Ackman
had to keep almost half his fund in cash - money
that he wanted to put to work in companies like
General Growth.
Today, General Growth is worth 140 times its
value in 2009. Pershing Square is thought to
have made about $3.5bn from its investment in
General Growth, but Mr Ackman still rues not
being able to invest more in the company.
“I had one hand tied behind my back,” Mr
Ackman recalls. “In 2009, we wanted to go on
the offensive. But even though we were up a lot
that year I still felt like we missed out. Because
of the possibility of massive redemptions we had
to hold too much cash.”
Hedge fund and private equity managers have
always been subject to the whims of their
investors or the rules of their funds. After all,
the money belongs to their clients. But, for the
managers, few things are more galling than
having to pass on a “sure thing” because they
have to give the money back, as Mr Ackman was
forced to do.
Now many of the world’s savviest hedge fund and
private equity managers think they have found a
way round the problem. Instead of traditional
funds that allow investors regular opportunities
to redeem their money, or buyout funds that wind
up after 10 years, they are looking TO RAISE
MONEY for vehicles that bring cash in that can
be invested in perpetuity. In the industry parlance,
this is known as “permanent capital” and is seen
as a new Holy Grail.
Whether these are stock market listed funds or
acquisition vehicles that RAISE MONEY in public
share offerings, or reinsurance companies that
bring in premiums to invest, they have a few
things in common: fat fees and an end to the
need to plead with potential investors to write
cheques every few years.
Private equity bosses, complaining about a
shortage of cheap companies to buy, are staring
at years of lower returns. And with hedge funds
having had their fourth consecutive year of
sub-10 per cent growth, pension funds such
as Calpers are reconsidering their investments.
Pressure on fees is intensifying and permanent
capital raised now could lock in arrangements
that may in the future look quite generous.
While it is too early to say how many of these
vehicles will justify the fees they pay to their
managers, the quest for permanent capital is
already changing the alternative investment
management industry. Hedge fund managers
and private equity firms are getting larger,
more diverse and more institutional, becoming
more like traditional fund management groups
Everyone is suffering
from Warren Buffett
Start or buy an insurance business
Insurance premiums provide EXTRA MONEY
to invest and enjoy favourable tax treatment.
Pioneers include Apollo’s Leon Black and
hedge fund manager John Paulson.
Set up a holding company
This follows the strategy used by Warren
Buffett, who shut down his investment
partnership to concentrate on Berkshire
Hathaway, into which he put stocks and new
Market a closed-end fund
Initial investors get shares they can sell on the
open market, while their money stays in the
fund in perpetuity.
Float a shell company
Known in Europe as shell companies, and in the
US as special purpose acquisition companies
(Spacs), these RAISE MONEY with a stock
market flotation even before they know what
they are going to acquire. Veteran investor
Wilbur Ross floated one last June.
Focus on real estate
Investors buying property, conducting mortgage
lending or trading mortgage-backed securities
can do so in a real estate investment trust
(Reit), which enjoys generous tax breaks.
Run a shadow bank
Business development companies (BDCs)
are a vehicle for investing in loans for small
and medium-sized businesses, thanks to tax
breaks in the US. Blackstone , Carlyle and KKR
manage BDCs.
where gathering assets may be prized ahead of
generating stellar returns.
The inspiration for many alternative managers is
Berkshire Hathaway, the listed investment vehicle
of Warren Buffett, who for 50 years has been able
to invest the profits from his businesses and the
premiums from his insurance operations without
investors pressuring him to return cash to them.
The result is that Berkshire is the fourth largest
company on the US stock market.
“Everyone is suffering from Warren Buffett envy,”
says the head of a private equity firm in New York.
Berkshire had the money for rescue loans to
Goldman Sachs in 2008 and Bank of America in
2011, moments of great fear in the markets when
everyone except the US government seemed to
be fleeing. Berkshire has made profits of more
than $12bn to date on those deals.
Mr Ackman has been mulling the need for
permanent capital since the crisis and, by giving
discounts on fees and other incentives, has lured
$6.7bn into a closed-end fund called Pershing
Square Holdings. The vehicle was listed on the
Euronext stock market in October, in what was
the largest initial public offering in Europe
in 2014. About one-third of the $18.5bn Mr
Ackman manages sits in this listed unit.
Unlike investors in Mr Ackman’s hedge fund,
Pershing Square Holdings shareholders who
want to cash out must do so by selling their shares
on Euronext, rather than withdrawing from the
fund. “Permanent capital is the best protection,”
he says. “I wanted to make it both compelling
and material.”
Listed funds have also been raised by Third Point,
the US hedge fund manager founded by Daniel
Loeb, and (twice) by London-based Brevan
Howard. Mr Loeb and David Einhorn’s Greenlight
Capital are also among the hedge funds to have
set up reinsurance companies in recent years.
These bring in billions of dollars in additional
money to invest, thanks to the companies’
capital reserves and insurance premiums,
and have favourable tax treatment. Apollo, the
private equity group founded by Leon Black, has
nurtured an insurance group that has added tens
of billions of dollars in permanent capital.
Other stock market listed vehicles could include
special purpose acquisition companies - also
known as shell companies - which raise capital
for a future deal, real estate investment trusts,
business development corporations and holding
Advocates in the industry believe permanent
capital vehicles hold the answer to another
long-running frustration of alternative asset
managers: the stock market’s refusal to value
their businesses as highly as traditional fund
management companies.
Public market investors dislike the volatility of
alternative asset managers’ fee income, which
is vulnerable to client redemptions and heavily
reliant on unpredictable performance fees. Since
permanent capital vehicles pay their managers’
fees in perpetuity, running them should be more
valuable, according to the theory.
“These vehicles are likely to be a meaningful
alternative,” says Marco Masotti, a lawyer with
Paul, Weiss, Rifkind, Wharton& Garrison in New
York, who helps many of the biggest firms to
A world . . .
(Cont'd from PAGE 42)
cents in every euro of revenues raised by
eurozone’s “soft core” - countries such as
Portugal, Ireland, Italy, Greece and Spain
France, Belgium and even the Netherlands now goes to simply servicing debts, let alone
also confront challenging debt burdens.
repaying them.
“Public debt sustainability is still far from
Without a growth and inflation spurt,
guaranteed in several periphery and perhaps
economists Barry Eichengreen and Ugo
also some soft-core euro area countries,
Panizza have pointed out that
despite record-low yields and
for their debt-to-gross domestic
unprecedented fiscal austerity
product ratios to stabilise, and
in the recent past,” the report
eventually fall towards the 60
said. “Public debt ratios are still
A key element in assessing
per cent targeted by the EU by
rising in all euro area countries,
sustainability is not just the
2030, the countries would have
except Germany and probably
level of debt but also the
to run primary budget surpluses
structure of debt
- before interest payments - of
Policy makers face a
between 4 per cent, for Spain,
dilemma on how to tackle
and 7.2 per cent, for Greece.
the problem. Deeper austerity
“These are large primary surpluses,”
would undermine growth and exacerbate
the two economists wrote. “There are both
debts. Boosting spending may help growth but
political and economic reasons for questioning
could also lift debt levels and intensify market
whether they are plausible.”
concerns. Restructuring debt is tricky when the
biggest holders are domestic banks that could
Economists at Barclays fear that the
be bankrupted by a haircut severe enough to
problem is not contained along Europe’s rim.
make a difference.
In a report last year they pointed out that the
structure them. “There is no ticking clock of a
finite life and there is always a readily available
pool of capital.”
Mike Vranos, founder of mortgage specialist
hedge fund Ellington Management, says the
ability to pick from a variety of capital-raising
structures increases a firm’s flexibility and thereis
a “game theoretical aspect” to picking the right
Since the crisis, Ellington has created and
listed two permanent capital vehicles, a Reit
and a $670m specialty finance company called
Ellington Financial, which buys mortgagebacked securities and also owns part of a
mortgage lender. “Permanent capital allows you
to go into less liquid assets and even operating
businesses, which require patient money,” Mr
Vranos said.
Permanent capital vehicles typically must be listed
on a stock market to allow investors the option
of getting out - and that comes with disclosure
requirements that would be anathema to hedge
fund managers a decade ago. “It is a higher
bar because there is a lot of scrutiny on the
manager, a lot of issues around infrastructure and
compliance, so you have to be up for it,” he says.
Those hurdles seem smaller, however, now that
many, such as Blackstone and KKR in the private
equity industry and Och-Ziff from the hedge
fund world, have floated their own management
companies on the stock market. Since the DoddFrank reforms of 2010, US hedge funds have
been required to register with the Securities
and Exchange Commission, and hedge fund
managers now get most of their money from
pension funds, which have high due diligence
Blackstone and Apollo have been among the
private equity pioneers which have transformed
their businesses into diversified investment
management companies spanning private
equity, hedge funds, asset allocation strategies
and numerous other products for clients,
including permanent capital vehicles. The
expansion of their model comes amid concern
that competition has cut the potential returns
from the traditional 10-year private equity fund.
Some large firms, including Blackstone and
Carlyle, are trying to lure their investors into
funds with a lifetime of up to 20 years as a halfway
house between the traditional 10-year fund and
permanent capital. Investors are divided about
the virtues of such a long lock-up.
Hanging on to lucrative investments longer is one
of the more powerful arguments of proponents
of permanent capital models.
Just ask Wes Edens about mobile phone towers.
His New York-based private equity and hedge
funds firm, Fortress, assembled a national
portfolio of towers after the dotcom bust but had
to sell the business in 2008. “Had we owned that
in a permanent capital vehicle we would still own
it today,” he says.
Fortress has been expanding its range of
businesses since the credit crisis, and now
has a diverse set of six listed or soon-tobe-listed vehicles that specialise in areas
including healthcare, mortgage services and US
As well as Mr Buffett’s, the business models Mr
Edens uses for comparison are those of Teekay,
a Canadian energy investor, and Carl Icahn, the
controversial corporate raider. Mr Icahn runs a
family-only hedge fund but also has an $11.4bn
listed vehicle called Icahn Enterprises, whose
businesses span railcars, metal recycling and
Mr Edens said: “Comparing yourself to Warren
Buffett, good. Comparing yourself to Carl Icahn,
not bad exactly, but Carl is Carl. However, if you
look at what he has done in the permanent capital
vehicle, it has been really productive.”
Not all the experiments in permanent capital
have been a success. KKR listed a vehicle on
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 45
Syndication articles from
Is chance to cut subsidies
The Financial Times [2013]. All Rights Reserved. Not to be redistributed copied or modified in anyway.(The client) is solely responsible for providing this translated content and the Financial Times Limited does not accept any Liability for the accuracy or quality of the translation.
By Ferdinando Giugliano - Economics
he World Bank has urged emerging
economies to use the plunge in oil prices
to reform “distorting” fuel subsidies, and
warned that failure to shore up public finances
could make them more vulnerable in a crisis.
In its twice-yearly Global Economic Prospects
report, the bank said lower oil prices would
boost world output by 0.5 per cent, while
reducing inflation globally by between 0.4 and
0.9 percentage points in the medium term. Oilimporting emerging markets are predicted to
the Euronext Exchange, but it was absorbed
into KKR’s New York-listed stock after trading
at a discount.
And even Mr Ackman, whose investments were
up more than 40 per cent in 2014, has not
received the stock market welcome he hoped
for. Despite his prediction that Pershing Square
Holdings will one day trade at a Berkshire
Hathaway-like premium, it has traded stubbornly
at a discount, suggesting investors want to build
in a margin of error in case performance slips.
The early evidence suggests potential
shareholders will be cautious about these
options for tapping the expertise of hedge fund
and private equity managers. The capital may be
permanent, but history suggests that investing
success may not be.
EXIT STRATEGY - After making a profit,
time to ‘harvest’ Alibaba?
Three years before Alibaba set a record with its
make large gains from the drop in oil prices, as
their output is more energy-intensive than many
richer countries.
But the big drop in crude prices - oil
benchmarks have plunged more than 50 per cent
since June, with Brent crude trading at below $50
a barrel yesterday - is also an opportunity for
governments to remove energy subsidies without
hurting consumers, the bank said.
Several countries, including Egypt and
Malaysia, have taken the axe to such schemes,
with Indonesia slashing subsidies in November
by 30 per cent. India ended state support for
diesel and raised natural gas prices in October.
“These are countries that have taken
substantial measures, but this is a great time to do
more, for oil-importers as well as oil-exporters,”
said AyhanKose, director of the division of the
bank that produced the paper.
The report echoed a recent call by the
International Monetary Fund. Olivier Blanchard,
chief economist, and head of commodities
RabahArezki said “low prices provide a great
opportunity to remove subsidies at less political
The IMF has estimated that the direct costs of
$25bn IPO, Silver Lake Partners began building
a stake in the Chinese ecommerce giant.
Silver Lake, a private equity firm, invested $450m
at a blended cost of $14 a share. It was a good
price: Alibaba went public in September at $68
a share, after which Silver Lake sold 7 per cent
of its holdings and distributed the proceeds to
investors, according to confidential letters to
Alibaba reached $88 by the end of the third
quarter, giving Silver Lake’s remaining stake a
value of $2.8bn. Those spectacular results have
given its Silver Lake Partners III fund - which
made its first investment in 2007 - a huge boost.
But when should Silver Lake cash out?
The life cycle of a private equity fund is generally
10 years. Investors expect managers to put their
money to work in the first five years and then
start to cash out.
The lock-up period for the listed shares for
there is always a
readily available
pool of capital.
These are countries
that have taken
measures, but this
is a great time to do
Alibaba’s private equity holders ends in March.
One investor says he would like Silver Lake to
either distribute the shares to investors or return
cash to them sooner rather than later.
This investor was told that Silver Lake has not
decided on when it will sell its shares. A general
partner such as Silver Lake has total discretion
over the timing of an exit. Still, the Silver Lake
fund is already in the period in which it would be
normal to wind down its holdings. A spokesman
declined to comment.
By contrast, General Atlantic, another private
equity firm with a stake in Alibaba, has taken
a different approach. It has what it calls an
evergreen structure, meaning it is not bound
to invest over five years and then “harvest” its
investments over the following five. It also has
much more freedom in timing its exits.
Investors who think Alibaba shares are a good
long-term bet might be happy to give their fund
managers a little extra freedom. Henny Sender
energy subsidies for the global economy were
$480m in 2011, equal to 2 per cent of total
government revenues.
The bank argues that subsidised fuel is an
inefficient way to help the poor, as it also benefits
the middle and upper classes. But the bank
pointed to a more immediate reason to cut the
state fuel bill: to strengthen public finances ahead
of a possible economic slowdown.
The bank warned normalisation of monetary
policy in advanced economies and, in particular,
higher interest rates in the US, posed significant
challenges for emerging markets. Tightening
financial conditions would make it harder for
central banks to support growth by cutting rates,
leaving fiscal policy as the main line of defence.
“Continued soft commodity prices . . . would
offer an opportunity to implement subsidy
reform, which would both help rebuild fiscal
space and lessen distortions associated with these
subsidies,” the bank said.
While it insisted debt levels in most emerging
markets were manageable, it warned deficits had
increased substantially since governments began
slashing taxes and increasing spending during
the financial crisis.
“Fiscal space has shrunk since the great
recession and has not returned to pre-crisis
levels. Thus, developing economies need to
rebuild buffers at a pace appropriate to countryspecific conditions,” the report concluded.
The bank said reforming energy subsidies was
a good way of committing to fiscal sustainability
without having to make other savings while
growth remained sluggish.
Profits blow sends Samsung
back down to earth
By Simon Mundy and Song Jung-a Seoul,
o-chief’s dream of connected homes is
sidelined by scale of challenge facing
handset unit
Yoon Boo-keun, Samsung Electronics’
co-chief executive, spent the early part of
this week sharing his dream of filling every
home with ever more interconnected devices.
Samsung’s aim, he said, was to transform
“our economy, our society and how we live
our lives”.
By yesterday, however, after Samsung
confirmed its first fall in annual profit since
2011, analysts and investors were more
interested in the near-term chances of
improved financial performance, than in the
South Korean group’s hopes for the “internet
of things”.
In preliminary guidance on its performance
in the final quarter of last year, Samsung
said its operating profit was about Won5.2tn
($4.7bn), down from Won8.3tn a year before,
on revenue that was down 12 per cent at
This was the fifth consecutive quarter of
falling earnings at Samsung, which has already
seen its smartphone division - overwhelmingly
its biggest profit generator - squeezed by
fast-growing Chinese rivals and Apple’s
successful launch of the iPhone 6. Yesterday’s
announcement also came amid continued
speculation about the company’s future and
a restructuring, with chairman Lee Kun-hee
still receiving treatment after a heart attack
Dispatches from
the tech world:
FT experts in San
Francisco, London
and Taipei upload
their views.
last May.
But, unlike in the two previous quarters,
Samsung saw no need to issue an explanatory
statement alongside the figures, which will be
followed by detailed results later this month.
Initially, investors responded to news that
the quarterly earnings were not as bad as
the average of analysts’ forecasts - pushing
shares in Samsung Electronics up 2.4 per
cent, before they fell back to close the day 0.5
per cent higher.
Analysts, though, appeared less convinced
that this represented a turnround. Lee Seungwoo, an analyst at IBK Investment & Securities,
said earnings at Samsung’s smartphone
division - which remains the world’s biggest
by volume - “seem to have bottomed out, but
are not likely to improve by much”.
He predicted that Samsung would try
to revive its high-end smartphone sales by
including features such as a metal casing
and curved display with its new flagship
smartphone, which is expected to be launched
in the next two months and called the Galaxy
Samsung’s current model, the Galaxy S5,
has been criticised for being too similar to
its predecessor and generating disappointing
sales since its launch last year - a problem that
some analysts attributed to consumers waiting
for the launch of the iPhone 6, which achieved
sales of 10m units on its first weekend on sale
last September.
At the same time, Samsung has been
losing market share in mid-range and low-
end phones in developing Asian countries.
Regional peers, particularly from China,
have succeeding in winning customers by
offering similar-quality phones at lower prices.
Among the most threatening of Samsung’s
competitors is Xiaomi, the Chinese group that
has become one of the top five smartphone
makers by volume and was valued at $45bn
in a fundraising last month.
According to research firm Gartner,
Samsung’s market share in China fell to 24.4
per cent in the third quarter of last year, from
32.1 per cent a year before.
Samsung is seeking to take on this
competition by launching new mid-range
smartphones with more attractive design
features. Last October, it unveiled two new
smartphones aimed at middle-class consumers
in China and, on Tuesday, it announced two
new phones for the Indian market.
But while the new handsets appear better
designed than Samsung’s previous budget
offerings, “their price competitiveness seems
to fall short of Chinese rivals”, claims Nam Daejong, an analyst at Hana Daetoo Securities. He
suggests this will make it difficult for Samsung
to regain lost ground on rivals.
Amid falling smartphone profits, investors
have focused again on Samsung’s longstanding
cash-cow: its semiconductor division, which
some analysts suggested was on track to
overtake the handset business as the biggest
contributor of profit. As the biggest memory
chip business in the world by sales, it has
benefited from strong chip prices driven by
limited supply following consolidation, as
well as growing demand from the smartphone
Mark Newman, an analyst at Bernstein, says
that if Samsung’s chip division has regained
Apple as a customer - as rumoured - the
financial benefits should kick in within the
first quarter of this year. But even if Samsung’s
quarterly earnings recover from the trough
reached in the third quarter of last year,
analysts think it unlikely that profits will
quickly return to levels of the first half of 2014.
A consensus forecast compiled by Bloomberg
puts 2015 operating profit at Won23.9tn,
which would be 4 per cent lower than last
year’s figure.
In the absence of strong earnings growth,
Samsung can expect redoubled calls from
investors for larger cash returns. Samsung had
Won53tn in cash, cash equivalents and shortterm financial instruments at the end of 2013,
and its net profit for the year was Won30.5tn.
However, the company returned only Won2.2tn
to shareholders - a payout ratio of 7 per cent.
By contrast, Apple’s payout ratio is 29 per cent.
In November, Samsung announced plans
to buy back $2bn of stock, and the following
month said it was “seriously considering”
increasing its full-year dividend up to 50 per
cent. Since the first announcement, its shares
have risen 9 per cent.
It might not fit with Mr Yoon’s visions of
the future but, yesterday, Nomura said it knew
where the group was heading: “Samsung is
transitioning from a high-growth stock into
a value stock like other global large-cap tech
P ag e 46
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
F il m - R e vi e w
Movie Review
January 9, 2015
Top Box Office(US)
Musicals were a thing of the
past but it seems that there are
efforts being made in order to
resurrect them. Movies such
as High School Musical and
Chicago are good examples. But
Fortune’s resident film critic
is not interested in jumping on
that bandwagon as he feels they
are becoming obsolete and for
good reason. He gives Annie a
very unsatisfactory four out of
10 stars.
The Hobbit: The
Battle of the Five
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Into the Woods
0 minutes after Annie began, I
got up from my seat, intending
to leave the cinema and
cleanse my mind of it. But it
immediately occurred to me that I was
not in the theater to just watch a movie
for recreation but to watch a movie for
recreation and report on its pros, cons,
meanings, themes and the general
emotional and objective resonance
it has on its audience. So, I sat back
down. 20 minutes later, I was back
up. I could not take the amateurish
and uninspiring mish-mash of ideas
the movie was trying to feed me. And
for that instant, I was the equivalent of
that Iraqi journalist who threw a shoe
at former President Bush. It was not
that Annie is the kind of movie that
alludes to controversial subjects - it
does not aspire to such ambition - it is
just the kind of movie that smears the
name of cinema.
Annie was illegally released before
it was legally released. It was one
of those movies that was planned
for distribution by Sony Pictures
Entertainment but got stolen and was
uploaded to the Internet for anyone and
everyone to watch. Apparently, North
Korea (or whoever it is, let is not point
fingers yet) is so angry at an amateurish
and sophomoric movie called The
Interview - which now, as a result, will
become a cult classic - that they have
hacked the studio and made available
over the Internet, Annie and several
other movies. For the most part, it is
inconsiderate to freely download works
of art that took someone a lot of sweat
and money to create,but Annie feels
like the kind of film that should have
been given away for free to begin with.
Annie is the story of Annie, a 10 year
old African-American girl who lives
in a foster home being looked over
by the cruel Miss Hannigan(Cameron
Diaz, in 2014’s worst performance)
with the hopes of one day meeting the
parents that abandoned her as a baby.
15 minutes into the movie, fate smiles
upon her as she accidentally, and
almost fatally, helps billionaire Will
Stacks get higher points on a mayoral
election. This gives way to the movie’s
main plot. Stacks takes her in so that he
could look more like a caring human
being in the public’s eye and get elected
mayor. Of course, what happens next
is obvious even to people that do not
watch movies that often. He grows to
like her more and becomes a better
person himself, all up until the point in
Weekly Revenue
Weekly Revenue
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Film Review |By Christian Tesfaye - special to Fortune
Annie, Why Musicals
Should Stay In The Past
which he would give up his mayorship.
A study of human nature and choice
in the world of materialism, Annie is
a movie with a nice sentiment. It tries
to educate us the great edict that a lot
of religions, books, songs and movies
preach; that love is better than moneyor
power. The movie does not whisper
this to us though, it screams it. Which
is not what good movies do, most of
them make their points audaciously,
but much more importantly, subtly.
As befits Hollywood, and Matti Cinema,
Annie is not original (but then again
neither is 12 Years a Slave) but an
adaptation of a Broadway musical of
the same name, which in turn is an
adaptation of a children’s short story
named Little Orphan Annie, which
ever since its inception has inspired
two other movies made in 1982 and
1999. I do not want to compare as to
which Hollywood production is the
best (all are bad) but the one that
is much more faithful to its source
material is the 1999 made-for-TV
version. Of course, this Annie, coproduced by Jay-Z and Will Smith
does not digress much from what was
first envisioned, but the book and the
Broadway musical (as did both the
previous movie adaptations) take place
during the depression era and Annie
lived in an orphanage instead of a foster
home. More importantly, this Annie is
different in that it pays less attention to
class differences and the rift they create
between people.
Annie stars Jamie Foxx as Stacks
and Quvenzhané Wallis as the titular
character. What makes both actors
similar in this movie is that they do
their best to give a good performance
in a movie that does not want them to.
They fight the odds but more than half
the time they lose miserably. Foxx does
not do the funny scenes in a manner
that suits an Oscar winner but still
does his best to feel dignified about it
while Wallis (an Oscar nominee, the
youngest one ever for Best Actress) is
left with a movie that fools the audience
into thinking that the movie is all about
her character when, in reality, it is
scarcely so. It is impossible to have a
protagonist that does not grow; whose
ideology and emotional complexity
does not peak or lower throughout
the movie. Annie does not change and
has no character arc that helps her
meld consciously with the audience
Annie is just the
kind of movie that
smears the name of
that is watching her. At some point
in the movie, she turns into a priest
who sermons ideals that could not
be rejected and leaves no room for
interpretation or reconsideration. She
is like a saint that never goes wrong and
has no personal flaw and that made her
a very boring character with whom to
spend 2 hours.
Co-scripted by Aline Brosh McKenna
(The Devils Wears Prada, We Bought a
Zoo) and directed by Will Gluck (Easy
The Woman in
Black 2 Angel of
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Night at the
Museum: Secret of
the Tomb
A, Friends with Benefits), Annie is a
guck of a movie. It was torture watching
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it but I am sure it would not be without
its audience. Kids who are not into
the Transformers and the Fast and
the Furious franchise (meaning little
girls) would love it. But as much as I
hated the movie, it sure looked good. 7
The cinematography was colorful and
very suiting for a cheesy musical. It had
Weekly Revenue
that big Hollywood movie feel to it and
The Imitation
as much annoyed as I am with most
movies made for a PG target audience,
it is nice to know that the movie I am
watching has high production value.
Aside from being badly acted, written
and directed, Annie’s biggest failure
Weekly Revenue
is that it is a musical that is obviously
The Hunger Games:
undertaken by people that have very
little experience in the genre. I believe
Mockingjay - Part 1
this is as a result of the fact that we are
in a different era, where musicals have
become increasingly rare. At a time
when movies like The Sound of Music
(1965), Gigi (1958) and Singin’ in
Weekly Revenue
the Rain (1952) were made, the genre
was the equivalent of a 21st century
The Gambler
Marvel comic book adaptation. A lot
of money and talent was invested in
them and everyone made sure that 10
they were going to be critical and
commercial hits. As the days went by
Weekly Revenue
and became years and decades though,
musicals (like westerns) became rare
for reasons of fashion and style. People
Big Hero 6
simply were not into movies where
characters start to sing and dance out
Coming Soon
of the blue anymore, and so musicals
almost disappeared. And Annie is the Human Capital
perfect example of why this genre does
not, and probably should not, exist
January 14, 2015
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 47
This column gives advice about new technologies as well as gadgets and provides information on how to use new products from the
digital world. Any questions on the day-to-day operation of one's computer can be addressed by emailing Dereje who is willing to
advise or assist readers whenever possible.
with Dereje Letiyebelu
email: [email protected]
Reading from Tablets before Bed Alters Sleep Cycles
f you are in bed reading this, you
may feel sleepy tomorrow morning.
A study has found that reading from
a light-emitting device, such as an
e-reader before bedtime can shift your
body’s natural clock and delay the onset and
characteristics of your sleep. And that could
leave you feeling more groggy the morning
after, according to the study published
online in the journal Proceedings of the
National Academy of Sciences.
A dozen people checked into the sleep lab
at Boston's Brigham and Women’s Hospital
and stayed for two weeks. During that time,
each spent five consecutive evenings reading
a book for four hours under reflected light,
and five evenings viewing an iPad for the
same duration (the order of the five-day
blocks was randomly assigned). All had
a mandatory bedtime of 10 p.m. and a 6
a.m. wake-up.
Blood tests showed those who read from
the computer tablet had suppressed evening
levels of melatonin, and on the next day,
the increase in that hormone occurred 90
minutes later, an indication of a shift in their
body’s circadian cycle, according to the
study. Long-term suppression of melatonin
by night time light exposure has been linked
to increased risk of certain cancers, the
study noted.
The study subjects using e-readers also took
10 minutes longer to fall asleep and had
nearly 12 minutes less rapid-eye-movement
sleep, a stage that has been linked to
memory consolidation, the study found.
Tablet reading participants also rated
themselves as less sleepy in the evenings,
a subjective measure that also correlated
with weaker electroencephalogram (EEG)
readings that are associated with transition
to sleep, the study found.
Those who used the e-readers also
described themselves as more sleepy the
morning after, and needed more time to
feel fully alert.
We really did not anticipate it would have an
effect the following morning, especially after
an eight-hour sleep opportunity and study
subjects slept the same amount of time, said
neuroscientist Anne-Marie.
Although the magnitude of the melatonin
shift was large, the smaller REM and sleep
delays also may contribute to the morning-
This site creates a revolutionary
new browsing experience that
provides you with an easy way to
save, share and discover your Web.
You can start by watching the 55
second video by pressing the play
button next to What is Wibki? in 55
seconds. The video gives you a taste
for what Wibki does.
after effects, Chang said.
Researchers suspect the quality of the light
from computer devices matters more than
its overall intensity relative to reflected light
cast on a book.These devices are enriched
for short-wavelength light, which is in the
blue range, Chang said.
Previous studies have shown that exposure
to such wavelengths strongly affects the
body’s circadian clock, compared with
exposure to light of longer wavelengths.
Researchers warned that the effects they
measured in a laboratory, with a mandatory
lights-out, may understate the problem in
the real world.
If you are in a home environment and you
are reading on a light-emitting device and
you are not feeling sleepy, chances are you
are not going to stop and go to sleep at the
time that you are supposed to, Chang said.
There are alternatives, however some
devices do not emit enriched light, and
there are ways to alter such emissions.
The study did not examine whether there
is a rebound period after putting down
the devices that might lessen their effects
on sleep.
There are so many things we do not know
about how these devices affect our health
and our sleep, she said. How much time
before sleep do you need to kind of wind
down? Is there a window when this light
will not have that effect? Those are very
interesting questions that need further
Handheld Vacuum Sealer
Plarail Camera
Keeping things sealed is always
a good thing – since it makes
sure that whatever is in there
would remain a whole lot
fresher, especially where foods
is concerned,
as opposed to
leaving it out in
the open air.
The Handheld
Vacuum Sealer
happens to be
a personal
vacuum sealer
which has been
rated best by the Hammacher
Schlemmer Institute, thanks to
its ease of use and long-lasting
seal. Sporting a pistol grip, a
relatively small form factor,
The Plarail Camera will boast
of more than 40 different
kinds of sounds and phrases,
making this a truly unique
shooter since it is a talking
train camera.
The buttons
and controls
on this puppy
have been
designed to
be simple
and effective,
which would
e n a b l e
children of a different range
as well as photographic
skills to be able to obtain
some decent results at the
very least. In addition, there
and ease of use that makes
it simple to use as opposed
to conventional countertop
models which tend to require
dedicated space. Apart from
that, it will also
be accompanied
by a dozen quartsize and an
equal number of
gallon-size bags
with integrated
valves; with the
bags being unable
to leak during
testing. The Best
model will vacuum out air
from a bag’s valve in a matter
of seconds, in order to lock in
food’s freshness while leaving
the bag’s mouth closure intact.
You can also scroll down the page
to learn a little bit more about it. If
it looks like something you would
like to try, you will need to register.
Wibki offers two registration
options: Sign up with Email and
Sign up with Facebook. If you do not
like any of the options you can type
a username into the blank text box.
Next up you will start customizing
your experience in three steps.
Step 1 is to pick your favorite
websites from their list. These are
things like Gmail, Facebook, and
are more than 20 kinds
of frames where one can
add the finishing touches
to the images, in addition
to the final data which can
be transferred
by a microSD
memory card.
w o u l d
also help
the wobbly
hands of your
children. This seems to be a
decent camera to get, even
for the train loving adult.
Step 2 you will pick your favorite
categories. These are more general
categories like lifestyle, recipes, art,
etc. You can pick up to seven.
Step 3 has you add the extension for
your browser. This will allow you to
easily bookmark your favorite sites.
It comes complete with installation
Now you will get the tour of the
user interface. Click through the
prompts showing you where things
are and how they work until you
get to the Done button. Now you
are ready to start using Wibki for a
unique browsing experience.
Go check it out for yourself today.
Enhance Organizational Productivity through Cloud File Sharing Technology
or the Cloud the, sky is the limit. It has
made it convenient for businesses
and individuals to store, access,
and regulate information from any
corner of the world. It has enhanced the
mobility of information. Cloud file sharing
can incredibly help businesses in boosting
the overall productivity. In this article, we
will look at some of the ways in which
businesses can enhance productivity
through cloud file-sharing software and
Access to Files from Remote Location
Utilizing cloud file sharing systems for
storing documents on remote, internetbased-cloud servers, you can access data
from any corner of the world provided you
have a device and an internet connection.
Companies, which require their staff to
work from different locations gain a lot
owing to the ease of access provided by
cloud file sharing and storage. It makes it
easy for professionals to work irrespective
of their location. With cloud storage, they
can save their valuable time and avoid any
delays which may occur just because they
are not at their office desk.
Enhanced Collaboration
With cloud file sharing, it is possible to
make professional communication and file
collaboration fast and easy. This enhances
productivity. Cloud sharing makes it
possible to improve collaborations not only
among employees but also among outside
associates. Workers, in different locations,
can collaborate on certain projects with the
help of cloud sites including Dropbox, Box,
One Drive, Share File, Alfresco, Ubuntu One,
Google Drive, and Amazon S3. All these sites
have virtual data rooms where you can store
files belonging to your company. With the
help of cloud software, files of different
users can remain synced in real time. This
implies that all users will have access to the
updated version of the file. All these benefits
greatly enhance the productivity through
improved collaboration. There is a lot of
time saving and also resource saving as
USBs can be discarded from the list of file
sharing options.
Less IT Support Hold-Ups
Easy to use cloud technology can improve
levels of productivity. Employees, wanting
to access different files, can easily
utilize the cloud based software to
navigate through the files without any
assistance from IT department. They will
need to seek support from IT people
on lesser occasions. This enhances
the overall productivity of employees
within the organization. As the cloud-file
sharing software constantly gets updated
and improved, it can be implemented
immediately. To help streamline and
enhance cloud-based operations, you can
avoid a number of cloud based sharing
services including cloud aggregators.
With these services, you can access and
manage all your cloud storage files on
different servers from a single cloud app.
Make Telecommuting Easy
During the past decade, the development
of technology has made work from home
an easy option for employees who cannot
commute to the work place for several
reasons. Initially, this trend was unaccepted
as it was thought that those working
remotely would be less driven and less
productive. However, with telecommuting,
it is possible to bring down the time wasted
by employees due to constant distractions
present at work place. This adds to the
productivity levels. With cloud-sharing
technologies, employees can access files
from anywhere and even update them in
real time.
Increased Protection
Remote data storage ensures high
productivity. Most of the professionals
face critical data loss due to technical
issues or natural disasters. Lost files equal
loss of time and productivity. Working
with cloud-based files can ensure safety
of the files and bring down productivity
delays. A number of cloud software offer
file restoration and recovery point options
so that work does not get affected due to
any incident. Cloud file sharing services
with internal data protection measures
including salt password encryption ensure
security of your data.
Simply put, using cloud technology
businesses can avail of storage and
collaboration tools that can enhance
productivity levels. If you want to go for trial
you can avail of could file sharing services
that offer limited amount of free storage.
Cloud aggregators can help businesses in
availing of the space available on different
free cloud file sharing services so that you
can avoid risks associated with depending
on a single service. Avail of cloud-file
sharing services and maximize your
P ag e 48
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
C on t i n u a t i on
Opposition Parties go . . .
said Merga Bekana (Prof),
chairman of the board, during
a press conference on January
4, 2015.
Another opposition party is
Semayawi (literally translated:
blue), a newcomer in the
political scene of the country.
The party, in confrontation
with the board since the launch
of the election process, shares
the sentiment by the above
opposition political parties.
The party argued that the
election of public observers
was full of mischief and the
independency of those elected
observers has got a problem.
Moreover, the parties strongly
criticize the financing system
of the board and as a reflection
of this discontent, Semayawi
party was not a part of a
discussion held between NEBE
and other political parties.
In some parts of the country,
public observers that were
not physically present were
elected, according to Yonatan
Tesfaye, public relations
officer of Semayawi. Such
symptoms can be an indication
that the election would not
bring a significant change.
However, the board rejects
such claims, saying, “they are
not based on the actual facts
and lack concrete evidence.”
There has not been a single
conspiring to act
as both the player
and the referee of
the game.
party that submitted its
discontent to the board, said
Demssie Benti, head of public
relations office at NEBE.
The Semayawi party is
organizing a campaign under
the slogan Freedom for Fair
Election in collaboration with
eight other opposition political
parties. The party wants to use
the opportunity to forward
demands on widening the
political space and in general
to follow up the process of
the election. The party could
withdraw from the election if
this campaign fails to achieve
its target and if the party faces
“unpleasant conditions in the
process, withdrawing from the
election is a political strategy
the party is considering.
(Cont'd from PAGE 3)
According to the
announcement made on
January 9, 2015, the board
condemned Semayawi for
falsely accusing and trying to
disrupt meetings held between
parties and the board and
acting against laws that are
supposed to be respected.
For this reason, the board has
requested the party to submit
its formal written apology by
January 12, 2015.
The Ethiopian Democratic
Party (EDP) shares the view
that there were problems
with the election of public
observers, arguing that the
public was not fully made
aware of the process.
The party was known for
its prominent role during
the 2005 election under the
leadership of Lidetu Ayalew
as a member of Coalition for
Unity and Democracy (CUD).
Common for all, despite claims
and counter claims forwarded,
these parties are saying they
are preparing themselves to
select candidates who will
run for the upcoming election.
Since then, the electorate is left
with six weeks to register as
voters and when there remain
five days before the closing
of the registration, election
campaign by political parties
will begin. Election Day is
scheduled for May 24, 2015.
A nno u nce m en t s
Life Studio for Kids Youth & Family
Vacancy Announcement
Administrator/Finance Officer
The Life Studio for Kids, Youth and Family ® is a new initiative in Ethiopia. It offers a range
of creative, healthy & balanced life skill programmes to equip Kids, Youth & Families with
a variety of conceptual and practical methods and tools. It promotes positive growth, the
development of human capacity and enhanced behavioural change for a happy, inspired
and motivated life. We work in association with Equal Zeal ® products and programmes
provided by its international offices in London/UK and Durban/RSA.
The Life Studio would like to recruit an Administrator/Finance Officer who can manage
the reception, administration as well as finances of the Studio. We are looking for an
energetic, inspired individual who are well organised, friendly, loves to work with kids,
youth and families and embodies the principles of the Life Studio.
The professional requirements for the position are:
Diploma and/or first degree in accounting
Excellent knowledge of finance software such as Peachtree or others
3-5 years experience of bookkeeping, producing financial reports, and preparing for
annual audits, etc. This should preferably be in a business environment.
Knowledge of laws and regulations pertaining to VAT, tax payments for the private
sector, etc.
Previous experience of managing a combined finance/administration position.
Excellent organisational skills, in filing, organising and setting up office systems.
Knowledge and experience in Excel, MS Word and other Microsoft Office programmes.
Fluent in English and Amharic.
Experience in communication and handling clients in a friendly and professional
Female Candidates are our preference. Please send your detailed CV indicating how
you match the above-mentioned requirements as well as a cover letter on why you
are interested to be part of this new initiative. CVs and cover letters should be send
by e-mail to [email protected] and cc to [email protected] or
alternatively by post to PO Box 100677, Addis Ababa, Ethiopia by 25 January 2015. It
can also be hand delivered to the Life Studio at Setema Building, Room 102 (turn up
from St. Mary Church on the road to Lamberet Bus Station – behind Beshale Hotel).
Derba midroc Cement Plc
Vacancies Announcement
No Position
Diploma in
0 year
Operator Accounting, Material
Supply Management,
Technology or related
Female applicants are highly encouraged.
Work Place:
Terms of employment:
As Per Company's Scale
Intersted applicants who fulfill the above requirement can submit
their application letter and copies of relevant testimonial documents
in person to the following address within 7 working days as of this
vacancy announcement.
Derba Midroc Cement Plc Head office
Nani Building/ Reception/
Tel: 011 554 9888
Life Studio for Kids Youth & Family
Call for Expression of Interest!
The Life Studio is in the process of compiling a database of professionals
who can render a wide range of services (on part-time basis) in the
following fields of interest:
Arts and Crafts (Various, e.g. Paper Mache, Jewellery Making, making
objects through recycling, Cookies and Cake decorations, etc. –
Surprise us with what you have to offer!)
Music and Dance
Drawing and Painting (Cartoon Drawing, Book and Manual Illustrations,
Drama and Story Telling
Healthy Cooking and Eating Habits
Tutoring and Study Techniques (Math, Science and English/Amharic
Languages for various age groups)
Children Games and Activities
Environmental Learning and Activities for kids and youth
ICT and Technology
Special Needs Educators
We kindly request you to send your CVs stating qualifications and previous
work experience together with one –page example outline/programme
of how you would conduct a one-day workshop in your field for kids of
any age group (as per your choice). Include a cover letter on why you are
interested to be part of this new initiative. CVs, cover letters and sample
workshop outlines should be sent by e-mail to [email protected]
and cc to [email protected] or alternatively by post to PO Box
100677, Addis Ababa, Ethiopia by 25 January 2015 latest!
It can also be hand delivered to the Life Studio at Setema Building, Room
102 (turn up from St. Mary Church on the road to Lamberet Bus Station
– behind Beshale Hotel).
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 49
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 50
Djibouti: Playing the Great Game
romoting itself as a safe haven amid
regional turbulence, President Ismail
Omar Guelleh's regime faces a
resurgent opposition and scepticism
that it can juggle its new alliances.
Twenty-five years after the fall of the Berlin
Wall, there is a new arena for high - stakes
diplomatic rivalries - Djibouti in the Horn
of Africa.
Some of the most powerful militaries in the
world - China, France, Japan, Russia and the
US - glower at each other across Djibouti's
Gulf of Tadjoura.
Overlooking the Red Sea and the Gulf of Aden,
the gateway to the world's busiest shipping
lanes in the Indian Ocean, Djibouti has an
unrivalled position.
It has the biggest deepwater port in the region
and hosts the logistical hub for US military
operations in East Africa and the Arabian Gulf.
Djibouti also houses the main US base
for launching Predator drones outside
France, the former colonial power, maintains
its largest military base in Africa there,
alongside its own facilities for launching
In a more experimental mode, the EU has
based its first joint anti-piracy mission,
Operation Atalanta, in Djibouti.
Russia has negotiated operating rights for its
navy there, and at Obock, on the north side of
the Gulf of Tadjoura, China is building its own
naval base after signing a military equipment
and training deal with Djibouti in February.
Landlord-in-chief for the world's militaries
and the would-be ringmaster in this new
'great game' is President Ismail Omar
Guelleh, who has ruled Djibouti since taking
over from his uncle, Hassan Gouled Aptidon,
in 1999.
A canny operator, Guelleh has used Djibouti's
strategic position to raise funds and dampen
Western criticism of his government's record
on democracy and human rights.
But a political crisis is looming as Guelleh,
66, faces a self-imposed deadline for his exit
after the 2016 presidential elections.
In March, Guelleh told our sister publication,
Jeune Afrique: "I am tired, and I know my
limits [...] I think that my mission is about
to be accomplished."
Reports of Guelleh's poor health, some more
fanciful than others, circulate in the capital.
On 27 May he was flown to Paris for
surgery at the Val-de-Grâce military hospital.
Guelleh's cancellation of the traditional
garden party on independence day, 27 June,
reinforced concerns.
However, some senior officials are urging
an apparently reluctant Guelleh to stay on.
"Despite my previous disagreements with the
President, I recognise that he embodies the
stability of the nation. There is no one else
who is equipped to do so," says a former
critic who is now a state functionary.
Local discontents about inequality and
worsening unemployment are rising.
"Most of the population is against this regime
because [it has] been there for so long,"
says Abdourahman Boreh, a businessman
turned oppositionist who is embroiled in a
tumultuous legal fight with Guelleh.
"If there were to be free and fair elections,
anybody from the opposition will win against
this regime. The successor doesn't have to
The Kempinski Palace hotel in Djibouti does not lack important foreign guests.
Here, a small
conflict even
individuals can
very quickly
become a political
come from his family or from the party, that's
what democracy is all about," Boreh says.
Officials in Guelleh's government talk of a
growing Islamist threat to Djibouti, a prime
target given the concentration of Western
military assets there.
They have also accused Boreh and activists
inside the country of launching grenade
attacks. Such charges are trumped up,
insists Boreh, arguing that the people the
regime labels as 'Islamists' are simply
former government supporters who now
want change.
The danger, says Boreh, is that the
government's crackdown could provoke
serious violence.
The government has banned the Mouvement
pour la Développement et la Liberté because
its Islamist policies contravene the secular
Its members have since joined the opposition
Union pour le Salut National, where they are
winning more support.
People returning from abroad often
bring different ideas. Guelleh encouraged
Djiboutians to return from Saudi Arabia,
Sudan, Egypt and Libya in 1999 with a policy
called Arabisation.
"As the only French-speaking country in this
region we feel terribly isolated [...] the real
problem emerged two years ago when the
Islamists swept all the seats in the capital. The
results were overturned, but the political role
of the Islamists was now a reality," admits a
senior presidential aide.
On the evening of 24 May, a bomb exploded
outside a restaurant in Place Menelik,
Djibouti city, killing three people.
The Islamists in the Somali rebel group
Al-Shabaab claimed responsibility, saying it
was revenge for Djibouti adding a battalion
Horn of Africa Initiative Gets
$8bn Commitment from Leaders
nited Nations secretary-general,
Ban Ki-moon, the World Bank
Group (WBG) president, Jim Yong
Kim, heads of other international
financial and regional institutions are coming
together, as they aim to promote stability and
development in the Horn of Africa.
This new financing represents a major new
opportunity for the people of the Horn of
Ban and Kim's visits, which start Monday
in Addis Ababa, Ethiopia, are meant to
support peace and security, and economic
development of the region through the new
Horn of Africa Initiative.
As part of their visit, the World Bank Group
has made a new financial pledge of 1.8 billion
dollars for cross-border activities that will
boost economic growth and opportunity,
reduce poverty and spur business activity.
The initiative covers the eight countries in the
Horn of Africa - Djibouti, Eritrea, Ethiopia,
Kenya, Somalia, South Sudan, Sudan, and
The bank said the new fund is in addition to
its existing development programmes for the
eight countries.
"This new financing represents a major new
opportunity for the people of the Horn of
Africa to make sure they get access to clean
This new
represents a
major new
for the people
of the Horn of
water, nutritious food, health care, education,
and jobs," Kim said in a statement on Monday.
"There is greater opportunity now for the
Horn of Africa to break free from its cycles
of drought, food insecurity, water insecurity
and conflict by building up regional security."
The European Union, whose top officials are
expected to join the visit, also pledged a total
of around 3.7 dollars billion until 2020, of
which about 10pc would be for cross-border
activities, while the African Development
Bank announced a pledge of 1.8 billion
dollars over the next three years.
The Islamic Development Bank also
committed One billion dollars to its four
member countries in the Horn of Africa,
Djibouti, Somalia, Sudan and Uganda.
Other leaders on the trip said that the Horn
of Africa region needs new development
assistance in order to secure peace and
opportunity to thrive and prevent future
"This mission is the apex of an ambitious
partnership approach that will provide
the necessary instruments to strengthen
the resilience agenda in the IGAD region,"
the Inter-governmental Authority executive
secretary, Ambassador Mahboub Maalim
The Africa Report
to the AU force in Somalia as well as hosting
Western troops.
Djibouti is sandwiched between a hostile
Eritrea and the ferment of Somalia, so its
security worries are deepening.
Small arms are smuggled in from Somalia
and used in firefights between rival gangs
in the capital.
And in the countryside, rivalries between Afar
and Issa pastoralists persist.
New military checkpoints, especially
in the Dikhil Region in the south-west,
have had some success in blocking the
arms shipments: "Foreigners, especially
Ethiopians, deposit their arms at military
checkpoints and pick them up when they
leave," explains Hassan Eleyeh, who sits on
a local peace council in the border town
of As-Ayla.
"Here, a small conflict even between
individuals can very quickly become a
political issue," he says.
As the neighbourhood gets rougher, Guelleh
has pulled another rabbit out of the hat:
economic ties and political cooperation
with Ethiopia.
In May at a ceremony at Djibouti port to
celebrate Ethiopia's reception of nine new
Chinese vessels, Guelleh declared: "We
believe that Ethiopia is Djibouti and Djibouti
is Ethiopia – no difference at all."
These marriage plans with Ethiopia, known
in local parlance as 'one country, two chiefs,'
have the backing of Addis Ababa. Ethiopia
has 94 million people, and Djibouti has just
under a million.
Ethiopia assiduously backs the Guelleh
government. When Eritrea's troops crossed
the southern border into Djibouti in 2008,
the Addis Ababa government sent 25,000
troops to defend what was once called
Ethiopia's Afar and Issa region.
Those troops stayed in Djibouti to defend the
port, through which almost all of Ethiopia's
maritime trade passes.
"The idea, when we mooted it, was to
create an economic community that would
essentially prevent the rise of the kind of
Islamist insurgency that has entrenched
itself in southern Somalia. And it has
been successful," says a former adviser to
Ethiopia's late Prime Minister Meles Zenawi.
Back in Djibouti, Samir Aden, an aide to
finance minister Ilyas Moussa Dawaleh,
explains the government's closer ties with
Ethiopia: "We initiated an integration of our
infrastructure to better negotiate a wider
regional integration ... [Djibouti] buys
electricity and will soon be importing water
from Ethiopia."
This refers to a new 70km aqueduct running
from eastern Ethiopia to supply Djibouti with
100,000m3 of water per day.
Next October, the 900km electrified railway
linking Djibouti port with Addis Ababa is
to open.
Financed by Beijing, the railway is eventually
to be extended to South Sudan.
Born in Dire Dawa, Ethiopia and a fluent
Amharic speaker, Guelleh has a life-long
affinity with Ethiopia, now reinforced by its
growing regional weight.
And his bid for an ever closer union with
Addis Ababa could be his final – and
contentious – parting shot if he decides to
quit his country's febrile politics.
The Africa Report
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 51
South Sudan’s Feb Dar Blend Crude Oil Exports
Set to Rise 4pc on month to 4.8m Barrels
outh Sudan was expected to export
an estimated 4.8 million barrels, or
171,429 b/d, of Dar Blend crude oil
in February, up four percent from
4.6 million barrels in January, a trader with
knowledge of the preliminary program said
A total of eight 600,000-barrel cargoes are
scheduled for lifting in February, compared
with four one million barrels and one
600,000 barrel cargoes in January, the
source said.
Dar Blend is a heavy, acidic crude produced
from blocks three and seven in South Sudan’s
Upper Nile State.
China National Petroleum Corporation,
which holds a 41pc equity stake in Dar
Petroleum Operating Company, has issued
a tender offering the first 600,000-barrel
cargo for loading over February 2-3 that
closes January 7.
CNPC is marketing the cargo on behalf of
stakeholders DPOC, the operator of the Dar
Blend oil field, which includes Malaysia’s
Petronas (40pc), South Sudan’s Nilepet (eignt
percent), China Petroleum and Chemical
Corp. (six percent) and Egypt Kuwait Holding
Chinese state-owned CNPC is also expected to
market two other jointly-held Dar Blend crude
cargoes of 600,000 barrels each for loading
over February 9-10 and February 25-26.
Apart from the three cargoes, South Sudan’s
Ministry of Petroleum and Mining is expected
Production of Nile
Blend crude from
South Sudan’s
Unity state remains
shut in since rebels
halted output.
to offer a total of 3 million
barrels of Dar Blend crude
for February, including a
600,000-barrel cargo it
Somalia: UN Gives Green
Light to Shipment Inspections
jointly holds with other stakeholders. The
ministry had offered 2.6 million barrels of
Dar Blend crude for January.
The ministry is expected to offer five stems of
600,000 barrels for lifting over February 5-6,
February 13-14, February 17-18, February
21-22 and February 28-March 1.
South Sudan’s Dar Blend crude production
has remained largely unaffected by fighting
that has impacted output of the country’s
other crude export, Nile Blend, traders said.
Production of Nile Blend crude from South
Sudan’s Unity state remains shut in since
rebels halted output after a failed coup
attempt against President Salva Kiir on
December 15.
Exports of the medium, low sulfur, waxy
crude have since been sourced from oil fields
in neighboring Sudan’s Kordofan state, which
have an estimated output of 60,000 b/d.
South Sudan has announced plans to repair
its oil facilities in Unity state, which had
earlier produced at 40,000-50,000 b/d,
but has yet to indicate when output might
The country’s revenue from oil exports
totalled 3.376 billion dollars in 2014,
Petroleum Minister Stephen Dhieu Dau was
reported as saying last week. South Sudan
will retain 1.711 billion dollars of the total
after paying 884 million dollars to Sudan and
repaying loans totalling 781 million dollars.
Hellenic Shipping News
A nno u nce m en t
Vacancy Announcement
In a bid to cut off funds for al-Shabaab, the United Nations Security Council on Friday authorised
the inspection of boats suspected of carrying illegal shipments of charcoal or weapons to and from
he resolution, adopted by
the 15-member council
with 13 votes in favor,
approves the use of "all
necessary measures" - diplomatic
code for military force - to carry
out such inspections.
Charcoal is giving al Shabaab a
Russia and Jordan abstained from
the vote over concerns about the
The council imposed an arms
embargo on Somalia in 1992 to
cut the flow of arms to feuding
warlords, who ousted dictator
Mohamed Siad Barre and plunged
the country into civil war.
The Security Council then banned
charcoal exports from Somalia in
February 2012 in a bid to cut off
funds for al Shabaab, an al Qaedaaffiliated group fighting for control
of Somalia and enforcing strict
sharia law in areas it occupies.
Jordan's Deputy UN Ambassador
Mahmoud Hmoud raised concerns
that the council resolution
does not contain "a sufficient
guarantee to prevent any abuse of
this authorization and to prevent
any obstruction of the maritime
The Eritrean
government says it has
no links to al Shabaab.
"It might be used for political gains
that go beyond the objectives of
the resolution that is to fight illicit
trade in charcoal and weapons,"
he told the council.
An international coalition of
maritime forces has for several
years been patrolling the waters
around the Horn of Africa nation
to counter piracy and other illegal
The Somalia-Eritrea Monitoring
Group, which oversees compliance
with UN sanctions on the two
countries, said illegal charcoal
exports in the past year were worth
at least 250 million dollars with
a third of shipments linked to al
"Charcoal is giving al Shabaab a
lifeline," Britain's UN Ambassador
Mark Lyall Grant told the council.
"The United Kingdom is confident
that the provisions set out in this
resolution will ensure that it is not
The Somalia-Eritrea Monitoring
Group said it counted 161 vessels
exporting charcoal from Somalia's
southern ports of Kismayu and
Barawe between June 2013 and
May 2014.
The cargos were mainly destined
for the United Arab Emirates,
Oman and Kuwait and 60pc of
the boats were Indian flagged or
Russia's UN Ambassador Vitaly
Churkin backed Jordan's
concerns about the inspection
of vessels and questioned the
work of the Monitoring Group,
claiming it had based some
conclusions on "assumptions
and rash accusations."
Lyall Grant said Russia was
defending Eritrea's government.
UN sanctions were imposed on
Eritrea in 2009 for supporting al
Shabaab militants.
The Eritrean government says it
has no links to al Shabaab and
wants the sanctions lifted.
The Africa Report
The Eastern and Southern African Trade and Development Bank, commonly
known as the PTA Bank, is a specialized African multilateral financial institution
serving most of Eastern and Southern Africa. The Bank’s objective is to provide
short and medium term finance to support viable projects and trade finance
activities in member states.
The Bank is looking for a self-motivated and results oriented Trade Finance
professional ready to join a team committed to building a world class African
financial institution. The Bank offers competitive and tax free salaries and
benefits commensurate with the standards of excellence that it expects.
Interested and qualified candidates from member countries are therefore
invited to apply for the following position.
Job Specifications:
Under the direct supervision of his/her immediate supervisor, the Officer
identifies and prepares trade finance facilities for financing by the Bank.
Structures trade finance facilities ;
Prepares credit papers and other documents for internal approval
Establishes /maintains strategic relations with clients at senior levels;
Produces technical and financial progress reports on trade finance
Undertakes sector policy review and other market intelligence studies
from time to time. Markets the Bank’s products.
BA Degree in Accounting, Banking, Business Administration, Finance or
Economics. A Master’s Degree and relevant training in trade will have
added advantage;
5 - 8 years post qualification and relevant experience in a reputable
financial institution, preferably in a commercial banking environment;
Skills in trade finance restructuring and capacity for business
Strong abilities in credit appraisal/ analysis, report writing skills,
organizational and planning skills;
Applications should include a resume, recent passport size photo, full
contact address and the names and addresses of three referees. Candidates
must have a good knowledge of the operating environment. Please note
that only shortlisted candidates will be contacted for interviews. Interested
and qualified candidates should express their interest by submitting their
applications directly to [email protected] by 20th January, 2015.
P ag e 52
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
56.Regulation of Supply of Services
and Spare Parts
b. maintain at all times complete servicing facilities to purchasers at
reasonable prices.
3. Where a business person fails to comply with the provisions of sub-article
(1) of this Article, such business person shall be deemed to have violated
the provisions of Article 37 (1) (c) of this Proclamation and, for this reason,
administrative and penal actions shall be taken against him pursuant to
Article 37 (2) and (3), Article 38, 39 and 60 of this Proclamation.
4. Where it is necessary to replace monopoly practices with competitive ones
in those areas of activity referred to under sub article (1) of this Article,
the Ministry may issue a directive which enables it to oblige foreign
suppliers represented by sole agents to have more than one agent or to
determine any sole agent to have a minimum threshold market share or
to have a market share not exceeding a certain percentage.
N.B. Basic goods or services mean goods or services related to the daily
needs of consumers, the shortage of which in the market may lead to unfair
trade practice. Basic public utilities” means utilities such as water, electricity,
telephone and the like and Unfair Trade Practice means any act in violation
of provisions of trade related Laws.
Proclamation No. 686/2010.
fine ine
Ambitions and goals look reachable and destination
seems close. However, maing hasty decisions are
discouraged. The high levels of energy in you bring the
possibility of hurried conclusions which may lead to loss.
Keep a firm focus and do not let your urge to see results
cause adverse effect. This may not be a good period to start
new projects. Make the most of this period to think, plan
and prioritize.
Businesspeople will find this week to be a good.
Although your business may be slightly slow towards
the start of the week, it will pick up over the weekend. Those
of you working in an artistic field will reap the benefits of your
efforts and progress in your field. This week is also a good
period for sales and marketing executives.
Your working style could bring problems for you.
Try to be more organized and efficient. You will
benefit if you were focused. This is a good week for those
of you interested in a job change and you will get the right
opportunity. But you will have to work to the best of your
abilities to establish yourself in the new organisation. Thinking
out-of-the-box seems to be a good idea.
You are likely to be assigned an important assignment
with strict deadlines. This will be a test of your
dedication. This is the perfect time for you to move your career
forward. Your seniors will appreciate your hard work. You
may also get promoted to a much higher position.
You will deliberately keep things as simple, clean and
easy to understand as possible. You will not conduct
business behind closed doors. This week emphasizes much
more oversight and clarity. A lot of political influence for
businesspeople will occur and this will take you to new levels.
Your creative juices seem to be flowing and you impress
everyone with your skills. Some of you will develop
your interests and hobbies into a successful career. You will
get recognition for all your hard work so far. If there are any
board meetings lined up, you have nothing to worry about.
This is a good time to apply for a new job that will
allow you grow. Make the most of your skills and
implement your ideas to achieve success. Your week will also
be a great one when you overcome your competition and are
chosen as a team leader. Human resource managers will get
good news about a promotion. MBA graduates are likely to
get some great opportunities.
You impress the people above you with your brilliant
performance. This might inspire them to give you
additional responsibilities, which might make your schedule
a bit hectic. Be tactful when it comes to any awkward situation
that comes your way. If you are in sales or marketing, be
thorough in order to achieve your targets. You might be
lagging behind in your deadlines so show some urgency.
A new job with better perks is indicated for most of
you. You may need to work a little harder to meet
your deadlines. Teamwork is a must if you want to meet your
targets ahead of time. Those of you working in the IT sector,
you should not even think about a job change. Your present
job will help you realize your career goals much sooner than
you expect.
Get the financial backing from someone who is
supportive for a quick implementation of your plans.
Your sustained efforts and prudent attitude in the business
deals or undertakings will yield results. Take care; your
emotional front can create some hassles. But even then your
unyielding strength will overcome the problems. Handling a
difficult financial problem skilfully will be your challenge.
This week could pose some serious challenges for
you. Students would have to work harder than usual to
concentrate on their studies. Any mistake made on the work
front could prove costly. Hence, they need to be careful and
pay attention to the finer details.
This will prove to be an excellent week for people
who are self-employed. Some of you might face a few
problems at work initially but the situation will improve as
the week draws to a close. It is an excellent time for students,
especially for those pursuing higher studies. This is also a
good week for sales and marketing executives.
Test 1
Which of these is not an island?
c) Cayman
e) Bahamas
b) Morello
d) Tahiti
f) Timor
77˚F. 25˚C X
Test 1 c)
Test 2
What is the meaning of Panache?
a) Dismay
c) Swagger
e) Misery
b) Trust
d) Medicine
Test 3
Place four of the three-letter groups
together to make two six-letter
Test 2 sTAR
Answers next week...
A doctor calls a plumber in the middle of the night.
‘Why are you ringing me at this hour?’ says the
plumber. ‘Look, it is an emergency,’ says the
doctor. ‘If it was the other way round you had
expect me to come out, wouldn’t you?’ ‘Okay,’
says the plumber. ‘What is the problem?’ ‘The
toilet is broken,’ says the doctor. The plumber
says, ‘Give it two aspirin and call me again
if it is not better in the morning.’
A man goes up to a politician at a party and
says, I have heard a lot about you.’ the politician replies,
‘but you can’t prove any of it.’
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 53
Pro-Poor Expenditure
Exchange Rates
for Transactions
For the supply of hand sanitizer and
automatic, electrical with chargeable
battery backup disperser. St. Paul’s
Hospital Millennium Medical College,
Tel. 011-275-07-25. Closing date: 30
days after publication. Publication: The
Ethiopian Herald, January 7, 2015.
For the renovation work of G+4 building
at Zewditu Hospital. St. Paul’s Hospital
Millennium Medical College, Tel. 011275-07-25. Closing date: 21 days after
publication. Publication: The Ethiopian
Herald, January 7, 2015.
For the procurement of infection
prevention materials. Ipas Ethiopia, Tel.
011-663-33-78. Closing date: January
30, 2015. Publication: The Ethiopian
Herald, December 31, 2014.
For the supply of electronics materials.
Commercial Bank of Ethiopia, Tel.
011-896-44-93. Closing date: January
15, 2015. Publication: The Ethiopian
Herald, January 8, 2014.
For the procrument of gardening service.
Ethio telcom, Address. ethio telecom
head quarter. Closing date: February
2, 2015. Publication: The Ethiopian
Herald, December 31, 2014.
For water construction. Tigray Region
Water Resource Bureau, Tel. 0314-44117-94. Closing date: February 10, 2015.
Publication: The Ethiopian Herald,
December 31, 2014.
Consultancy service for preparation
of detailed engineering design and
supervision of construction, relocation,
rehabilitation, installation and
commissioning of a cigarette factory.
National Tobacco Enterprise, Tel. 011552-11-70. Closing date: February
19, 2015. Publication: The Ethiopian
Herald, January 7, 2015.
For the procurement of different
furniture. Ethio telecom, Address: ethio
telecom head quarter. Closing date:
January 27, 2015. Publication: The
Ethiopian Herald, January 7, 2015.
For consultancy, supply and construction
of sprinkler irrigation project
development service. Oromia Irrigation
Development Authority, Tel. 011-15649-33. Closing date: 15 days after
publication. Publication: The Ethiopian
Herald, December 31, 2014.
For civil work construction Taffemulti
Village second round water supply
project. Oromia, Water, Mineral and
Energy Bureau, Tel. 011-550-9622. Closing date: January 20, 2015.
Publication: The Ethiopian Herald,
December 31, 2014.
US Dollar
Pound Sterling
Swiss Franc
Swedish Kroner
Norwegian Kroner
Danish Kroner
Djibouti Franc
Japanese Yen
Canadian Dollar
Indian Rupee
Kenyan Shilling
Australian Dollar
South African Rand
Chinese Yuan
Pound Sterling
Swiss Frank
For building and infrastructure plan
and machinery valuation and business
valuation. Privatization and Public
Enterprises Supervision Agency, Tel.
011-869-37-29. Closing date: February
03, 2015. Publication: The Ethiopian
Herald, December 31, 2014.
Swedish Kroner
Norwegian Kroner
Danish Kroner
Djibouti Franc
Japanese Yen
Canadian Dollar
Saudi Riyal
For procurement of soil test and
geotechnical investigation. Federal
Ministry of Health, Tel. 011-550-0941. Closing date: January 28, 2015.
Publication: The Ethiopian Herald,
December 31, 2014.
UAE Dirham
Central Africa Franc
Source: Ministry of Finance & Economic Development (MoFED)
Last updated on Dec. 29, 2014.
Birr is expressed in terms of one unit of
each foreign currency applicable on
Jan. 7, 2015.
Source: Commercial Bank of Ethiopia.
Business Calender 2015
Please send us your events for next week
by email to [email protected]
com. We will print your information in this
corner of our publication for free.
Use the opportunity to promote
your big events.
የኢትዮጵያ ምርት ገበያ
Fiscal Year
Exchange Rates
for Cash Notes
US Dollar
Consultancy for inventory and
revaluation of assets. Ethiopian Road
Construction Corporation, Tel. 011-55381-71. Closing date: January 15, 2015.
Publication: The Ethiopian Herald,
December 31, 2014.
as Percentage of Total Government Expenditure
For the construction of boreholes spate
irrigation and diversion. Tigray Region
Water Resources Bureau, Tel. 0934-44117-94. Closing date: February 5, 2015.
Publication: The Ethiopian Herald,
January 7, 2015.
Source: Ethiopian Shipping Lines.
Benchmark Currency Rates
10 Feb - 12 Feb 2015
WACEE-West African Clean Energy &
Environment Exhibition & Conference
Accra, Ghana
Business sectors: Energy, Environmental
his chart displays the exchange rates of eight major world currencies. Scan
across the chart to find the rate of exchange between any two of the currencies.
03 Feb - 05 Feb 2015
Lagos, Nigeria
International Hard and Soft Commodity Prices
Building, Construction
10 Feb - 12 Feb 2015
Lagos Fashion-International
Fashion and Ready-to-Wear
Garments Exhibition
Jan. 7, 2015
Building, Construction and Machinery
Business sectors: Building Machinery,
Lagos, Nigeria
Business sectors: Apparel, Clothing,
Fashion, Ready-to-Wear
Last updated on Tuesday, Jan. 6, 2015.
Nothing is done. Everything in the world remains to be done or done over.
Coffee 'C' Future (Usd/Lb.)
Corn Future (Usd/Bu.)
Soybean Future (Usd/Bu)
Wheat Future (Cbt) (Usd/Bu)
Live Cattle Future (Usd/Lb)
Gold 100Oz Future Usd/T Oz)
Sugar No. 11 (World) (Usd/Lb)
Cotton No. Two Future (Usd/Lb)
% Change
These international commodity prices are indicative of future prices as speculated by market analysts.
They are, therefore, subject to change. They are in US dollars, and the prices recorded are those of
Jan. 7, 2015.
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 54
Fortune Classified
t is a condition of the acceptance of advertisement orders that the proprietors of Fortune do not guarantee the insertion of any particular advertisement on a specific date or at all, although every effort
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or deletion of any objectionable wording, or the rejection of any advertisment. Although every advertisement is carefully checked, occasionally mistakes do occur. We, therefore, ask advertisers to assist
us by checking their advertisement carefully and advising us immediately so that an error will not occur. We regret that we cannot take responsibility for more than ONE INCORRECT insertion and that no
republication will be granted in the case of typographical or minor changes that do not affect the value of the advertisement. Fortune will not assume any liability for the content of advertisements. The
advertiser is responsible for any material he or she publishes in our paper. Fortune Management.
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Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
P ag e 55
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P ag e 56
Fo rt u n e Vo l . 15 No. 767 J a n . 11, 2015
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