Business Section

Real Estate in Ethiopia: Q&A About KEFITA with CEO & Founder of ROCKSTONE

In the following interview with Tadias, Dietrich E. Rogge, the CEO & Founder of ROCKSTONE, a German-based developer, discusses their new state-of-the-art condominium development called KEFITA under construction in Addis Ababa. (Courtesy photo)

Tadias Magazine

By Tadias Staff

Updated: September 6th, 2021

New York (TADIAS) — Ethiopians in the Diaspora are receiving growing opportunities to invest in real estate in Ethiopia. Some of the new high-rise buildings — mostly in Addis Ababa (built by both local and international developers including from Asia, America and Europe) — offer international standard amenities while incorporating local architectural styles as well as easy access to shopping, transportation and other daily necessities.

In the following interview with Tadias, Dietrich E. Rogge, the CEO & Founder of ROCKSTONE, a German-based developer, discusses their new state-of-the-art condominium development called KEFITA under construction in the kebena area (officially known as the District of Signal), one of Addis Ababa’s oldest neighborhoods.

“It is our vision that KEFITA shall be a best-in-class real estate development combining international best practices while also being a genuinely Ethiopian building both in terms of design and amenities,” Dietrich told Tadias. “What we highlight with KEFITA that makes it uniquely Ethiopian is the facade.” He added: “If you look at the building closely, it mirrors the interwoven nature of the tibeb, the traditional garment of the Ethiopian cultural dress. Along with that, the building is covered with living plants indigenious to Ethiopia. Our hope is to create connectivity among both Ethiopians and international residents at KEFITA. And with that, create long-term value for all its owners.”


The KEFITA building under construction in Addis Ababa by ROCKSTONE Real Estate. (Courtesy photo)


(Courtesy photo)


(Courtesy photo)

As Dietrich noted when he first traveled to Ethiopia about a decade ago, he immediately “fell in love with the country, its genuine culture, the warmth of its people and the metropolitan character of its capital, Addis Ababa.” He shares: “Until then, my own exposure to Ethiopia had been limited to meeting a very friendly Ethiopian through mutual friends while I was studying and living at MIT in the US from 2000 to 2002.”

In addition to incorporating modern international designs with Ethiopian architectural sensibilities, the KEFITA building also is set to become the first such residential building in the country to receive the green building certification.

Below is our full Q&A with Dietrich E. Rogge, CEO & Founder of ROCKSTONE Real Estate

TADIAS: Dietrich, thank you so much for your time. Please tell us a bit about yourself, your background, how you were introduced to Ethiopia and what led you to work in Addis?

DR: Thank you so much for having me today Liben. I appreciate having this interview and being able to introduce myself to you as well as your audience. To give you some context, I am based in Munich Germany. I started ROCKSTONE in 2013, today we have 3 offices – Berlin, Hamburg, and Munich – in Germany, and by 2018 we expanded into Lisbon in Portugal and thereafter Madrid in Spain to diversify into other European countries. Still, I had the genuine desire to expand further internationally, and Africa was my top priority. Next to diversifying my business, the drive into other countries is on a personal level very much driven by my own fascination for travel, countries and authentic cultures. Fortunately, one of my closest friends and also now business partner in ROCKSTONE ETHIOPIA had been living and working in East Africa for over 10 years. We decided to explore real estate business opportunities in East Africa. When it came to where to start, he immediately pointed to Ethiopia. When I first arrived in Addis, I understood what he meant. I instantly fell in love with the country, its genuine culture, the warmth of its people and the metropolitan character of its capital, Addis Ababa. Until then, my own exposure to Ethiopia had been limited to meeting a very friendly Ethiopian through mutual friends while I was studying and living at MIT in the US from 2000 to 2002.


Dietrich E. Rogge, CEO & Founder of ROCKSTONE Real Estate. (Courtesy photo)

TADIAS: Please tell us about the KEFITA building project and the inspiration behind it?

DR: It is our vision that KEFITA shall be a best-in-class real estate development combining international best practices while also being a genuinely Ethiopian building both in terms of design and amenities. What we highlight with KEFITA that makes it uniquely Ethiopian is the facade. If you look at the building closely, it mirrors the interwoven nature of the tibeb, the traditional garment of the Ethiopian cultural dress. Along with that, the building is covered with living plants indigenious to Ethiopia. Our hope is to create connectivity among both Ethiopians and international residents at KEFITA. And with that, create long-term value for all its owners. On a business level it quickly became clear to me that, similar to other metropolises – i.e. Berlin, Lisbon or Los Angeles – around the world, there is also a housing crisis in Addis. That’s because each year large cities attract more new residents than they are able to build new housing along all segments of the market. There are also a couple of specific reasons why this dilemma exists in Addis, namely, lack of trust in the real estate market, lack of building quality, and lack of foreign capital. Next to addressing these specific reasons by forming a very strong team together with our local partner Bigar, and US-based private equity firm Cerberus, all of whom have a long-term interest in Ethiopia, we defined a clear strategy.

TADIAS: KEFITA is located on Embassy Row in the District of Signal, which is one of Addis Ababa’s oldest neighborhoods. How did you choose the location and what do you like most about the area?

DR: That’s a great question, and I am happy you are asking since choosing the right location is obviously a centerpiece of any real estate development and it is entirely fair to ask a foreigner his view on Addis. We initially looked at locations in Bole and Old Airport, which are the more recent traditional neighborhoods for high-end residential developments in Addis. We carefully studied how Addis is expected to develop over the coming years in terms of density, traffic, schools, retail, security and leisure. Signal is well positioned to outperform other parts of the city over the coming years in terms of its quality of life due to its proximity to the city center, great schools, improving infrastructure, and best of all, Mount Yeka with all its outdoor activities.


(Courtesy photo)


(Courtesy photo)


(Courtesy photo)

TADIAS: In addition to incorporating modern international designs with Ethiopian architectural sensibilities, the KEFITA building also is set to become the first such residential building in the country to receive the green building certification. Can you share what that means and how it fits with the city’s long-term plans for environmentally conscious developments?

DR: Sure, and let me happily expand on that subject since it is very important to us. As we discussed earlier, integrating best practices into Kefita on all levels is one main driver of our product and development process. From the very beginning, our entire design process has been driven toward green-conscious living. Next to reducing the carbon footprint of the building, specific measures include using local materials as much as possible, minimizing electricity consumption, collecting rain water and managing waste. Among others on the building side, that includes superior structural and fire safety design and a range of Kefita specific amenities for our community. A green building also best ensures the long-term value of the investment. I would really like to emphasize this last point since return on investment and building quality go hand in hand. Next to its location, the long-term value preservation or increase in value of any real estate is driven by the longevity of its design and construction quality. If the structure has flaws or moisture permeates into the building or energy consumption is inefficient or sound insulation is not taken care of just to name a few, then these issues obviously have a negative effect on the long-term value of any real estate. Hence our building standards we believe are a very strong signal to send to the Ethiopian real estate market and will help elevate the overall standard and building quality of new buildings in the future.

TADIAS: Where are you now in terms of the construction stage and when will the building be completed?

DR: We received the building permit last year, completed the underground construction in 2020 as well, and started with the actual building construction early this year. KEFITA is on track to be completed in 2023 for all residents to move in. The completion date is very important to us since on-time completion is a huge problem in the market and it translates into a lack of trust in developers. Therefore we have created a financially very strong team, started construction only once the design was completed and the entire construction contract had been awarded. In addition, our best practices approach extends into the purchase agreement which protects buyers on various topics as well as states binding delivery dates.


(Courtesy photo)


(Courtesy photo)


(Courtesy photo)

TADIAS: How can people in the Diaspora buy property in the building? What’s the process and requirements?

DR: From the start, the Ethiopian Diaspora had always been in our minds as a key customer segment for KEFITA. We know that we are well positioned to serve that segment. We believe that our product is a good balance between Ethiopian authenticity, a modern building in terms of quality, technology, services as well as sustainability. Last not least, it fits all rental criteria of the International community in Addis. All of these is what the Diaspora has in mind but struggles to find as an investment opportunity. The prerequisite for owning real estate in Ethiopia requires an Ethiopian Origin ID, also known as the Yellow Card. All of our Diaspora buyers will need to provide a copy of their ID as well as Passport to initiate the sales agreement. The process involves meeting and talking with one of our sales representatives, learning our different offerings for apartment types, identifying their mode for financing, either cash or through one of the Ethiopian banks, and finally signing an Apartment Purchase Agreement. If based in Ethiopia, prospective buyers can reach out to Lily Mesfin, lm@rockstonere.com. For those based in the USA and abroad, reach out to Nya Alemayhu at ny@rockstonere.com.

TADIAS: Can you tell us more about the various apartment sizes and price ranges?

DR: We have 100 apartments ranging from 2 bedrooms and 1 bathroom at approximately 1,000 square feet to a full floor penthouse at 6,500 square feet. In between this range exists 2 bedrooms + 2 bathrooms, 3 bedrooms + 3 bathrooms, and 4 bedrooms + 4 bathrooms. Some of our 2 bedrooms are convertible to 3 bedrooms, as well as some 3 bedrooms that can be converted to 4 bedrooms. All of the apartment types aside from the 2 bedrooms + 1 bathroom are designed with a helper’s room, as is common in most Ethiopian residences. The pricing ranges from $280,000 for a 2 bedroom + 1 bathroom apartment to $2,100,000 for our crown jewel garden terrace apartment.

TADIAS: Is there a mortgage or payment plan available?

DR: We have a payment schedule that is contingent on construction progress. The initial investment is 25% and all subsequent payments are in alignment with construction progress. The payments are spread out about 3-4 months apart. If one seeks a mortgage, we can refer to a few banks based in Addis Ababa so that prospective buyers can make the best decision as to what suits them. There are nuances with financing new construction projects in Addis Ababa and also which type of currency is used. Our sales team can also help illuminate this process more deeply. For a deeper inquiry, reach out to sales@kefita.com


(Courtesy photo)


(Courtesy photo)

TADIAS: What are your plans for future developments in Ethiopia?

DR: Although KEFITA is only our first project in Ethiopia, it won’t surprise you that we have a long-term plan for ROCKSTONE Ethiopia with more projects to come. These will obviously include additional residential developments but we are also looking into offices, logistics, and retail – commercial real estate. We very much believe in strong and lasting Ethiopian growth and want to happily be part of that over the coming years.

TADIAS: Is there anything else you would like to share with our audience here in the United States and beyond?

DR: On a personal level, my experience in Ethiopia has been wonderful and I am very fortunate to have come close to and made friends with Ethiopians over the past years. These relationships have evolved into great friendships. I really look forward to having more time for traveling within the country and enjoying all its treasures and beauties. Last but not least, I also hope to come to the US very soon to present KEFITA in person and likewise, I invite you all to meet our team and myself whenever you are in Addis.

TADIAS: Thanks again, Dietrich, and wishing you all the best from all of us at Tadias!

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UPDATE: Ethiopia to Reopen Bidding for Second Telecoms License, Officials Say

A customer holds a 3G prepaid sim card after buying the service from an Ethio-Telecom shop in Addis Ababa, Ethiopia, November 12, 2019. (REUTERS/Tiksa Neger)

REUTERS

By Dawit Endeshaw

EXCLUSIVE Ethiopia to reopen bidding for second telecoms licence, officials say

ADDIS ABABA, Aug 2 (Reuters) – Ethiopia will reopen bidding for its second telecoms operator licence this month, two senior government officials said on Monday, including the right to operate mobile financial services.

The Horn-of-Africa nation sold only one of two full-service licences on offer in May, citing a lower-than-expected price for the second one, which it now wants to offer again. read more

“We have made some changes that can uplift its value, for instance mobile financial service,” Balcha Reba, director general of the Ethiopian Communication Authority, told Reuters.

The International Finance Corporation, the private sector arm of the World Bank, will serve as transaction adviser in the deal, said Brook Taye, a senior adviser at the ministry of finance.

The government expects prospective bidders to include firms which had expressed interest in the previous attempt to sell the licence but whose bids were deemed to be insufficient, Brook said.

“We expect to have a strong interest,” he said.

A consortium led by Kenya’s top operator, Safaricom (SCOM.NR), secured the first licence. South Africa’s MTN (MTNJ.J) had also bid in the first round but it was not awarded a licence.

Safaricom’s winning bid of $850 million could serve as a guide for the price of the remaining licence.

“At least there is a benchmark and to uplift this benchmark we are working on amending the policy,” Brook said, citing the automatic inclusion of the right to operate mobile financial services, which was not present in Safaricom’s licence.

Mobile financial services have become a significant part of African telecom operators’ businesses since Safaricom pioneered them with M-Pesa in 2007, giving people an alternative to banks.

State monopoly Ethio Telecom, which launched a new mobile financial service called Telebirr in May, snagged 4 million users within weeks, showing the potential of the market.

A separate sale of a 40% stake in Ethio is going on, part of a drive to liberalise the sector and also open up the broader economy.

The economic reforms were initiated by Prime Minister Abiy Ahmed, whose troops are engaged in fighting with local forces in the northern region of Tigray, when he came to power in 2018.

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UPDATE: France’s Orange Submits Interest for Stake in Ethio Telecom – Official

A woman walks past the logo of French telecom operator Orange at the company headquarters in Issy-les-Moulineaux near Paris, France. Ethiopia's ambassador to Paris Henok Teferra Shawl said in a tweet Orange had "formally submitted interest to participate in the partial privatisation of @ethiotelecom." (REUTERS)

Reuters

ADDIS ABABA – France’s telecom firm Orange has submitted an expression of interest to participate in the ongoing partial privatisation of Ethiopia’s Ethio Telecom firm, Ethiopia’s ambassador to Paris said on Twitter on Tuesday.

Henok Teferra Shawl said in a tweet Orange had “formally submitted interest to participate in the partial privatisation of @ethiotelecom.”

Priti Patel defends £54.2m payment to France in effort to reduce migrant crossings
Last month, Ethiopia launched a tendering process for the proposed sell-off of a 40% stake in the state-owned carrier Ethio Telecom to private investors, part of the government’s broader plan to open up the Horn of Africa country’s economy.

The telecoms business in Ethiopia, a country with a population of more than 100 million people and one of the region’s biggest economies, is considered lucrative and is expected to draw significant investor interest.

As part of the process to open up the telecoms sector in May authorities handed out the first private operator licence to a consortium led by Kenya’s Safaricom, Vodafone, and Japan’s Sumitomo.

Ethio Telecom reported an 18.4% rise in full-year revenue to end-June to 56.5 billion birr ($1.29 billion).

(Reporting by Dawit Endeshaw; Writing by Elias Biryabarema, Editing by Louise Heavens)

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UPDATE: Ethiopia Grants Final License to New Mobile Operator

In a statement, the Ethiopian Communications Authority (ECA) said the license was issued to Safaricom Telecommunications Ethiopia, a freshly incorporated local telecoms operating company owned by the Global Partnership for Ethiopia (GPE) consortium which consists of Safaricom, Vodacom, Vodafone Group, Sumitomo Corporation and CDC Group. (Mobile World Live)

Mobile World Live

The first private mobile operator in Ethiopia moved a step closer to launching services after the nation’s regulator issued a final license to the newly created local company run by a consortium which recently received the green light to start operations.

In a statement, the Ethiopian Communications Authority (ECA) said the license was issued to Safaricom Telecommunications Ethiopia, a freshly incorporated local telecoms operating company owned by the Global Partnership for Ethiopia (GPE) consortium which consists of Safaricom, Vodacom, Vodafone Group, Sumitomo Corporation and CDC Group.

Effective from 9 July, Safaricom Telecommunications Ethiopia was granted a “nationwide full-service” license with a term of 15 years and a renewal option for a further 15, subject to fulfilment of all necessary obligations.

Commenting on the move on Twitter, Safaricom congratulated the new entrant for “going beyond and earning a final full-service nationwide telecoms license to operate in Ethiopia”.

Earlier this month, the consortium announced the new operator will be headed by Vodacom DRC MD Anwar Soussa.

Ethiopia commenced a process to issue two new mobile licences in November 2020, issuing one to GPE in May.

At the time, the consortium pledged to invest $8 billion into the Ethiopian entity in the span of ten years.

After Safaricom Telecommunications Ethiopia launches services, it will be the second company operating in the market alongside state-run Ethio Telecom.

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Renewed Hope: How Bitcoin And Green Energy Can Save Ethiopia’s Economy

The future headquarters of the Commercial Bank of Ethiopia CBE in Addis Ababa. (Getty Images)

Forbes

Selamawit Girma, a mother of three living in Ethiopia’s capital Addis Ababa, is worried.

Her monthly salary of 4,000 birr (about $91) isn’t going as far as it used to. Inflation surpassed 20% in Ethiopia last year and it’s still rising–up to 24.5% in June–as the country struggles to contain the economic fall-out of the covid-19 pandemic.

“I am very scared of the current cost [of things],” she told The Addis Standard.

“I am afraid of being on the streets with my children. Prices are increasing in house rent, transport, foods and non-food items … which the government seems to be doing very little about.”

It’s not for want of trying. Ethiopia has one of the most stable and diverse economies in Africa, benefiting from a forward-looking government that has consistently met development targets for its 117 million citizens. The number of Ethiopians living below the poverty line has more than halved since 2000.

Yet, whatever strides are taken domestically, Ethiopia exists within a global financial order that puts the US dollar–the world’s only reserve currency–at its apex.

Supply of these dollars is determined solely by the US Federal Reserve, which has a mandate solely to protect US economic interests.

And while printing trillions of dollars to stimulate demand seems to be helping America–in the short-term, at least–the practice is having a devastating impact on poorer nations whose currencies are directly or indirectly pegged to USD.

“The Fed is tasked with solving US monetary problems and not [those of] other countries,” explained a spokesman for Project Mano, an Ethiopian lobby group that wants Addis Ababa to consider whether bitcoin–a decentralized cryptocurrency with a fixed supply–can break the inflationary cycle.

“It is our problem, because we rely on another country’s monetary policy. They don’t do it out of spite or to hurt us … It’s our own choice to hold dollars.”

Understanding how ultra-loose monetary policies in the West can hurt developing nations isn’t difficult.

The not so almighty dollar

The National Bank of Ethiopia currently holds about $3bn worth of foreign exchange reserves–the vast majority of which is in USD.

These holdings don’t increase proportionally as the Fed prints more and more money, so their real value–or their purchasing power–is gradually eroded by inflation.

At the same time, Ethiopia’s government is overseeing the steady devaluation of its own currency, the birr, in an effort to stop the country’s $12bn trade deficit from growing any larger. (Devaluing a currency makes domestically produced goods more affordable on the international stage, thereby driving exports and helping to balance the books.)

Taken in isolation, each of these trends would be manageable.

But when the value of a country’s domestic currency and the value of its foreign reserves fall in tandem, there is a real and present danger of economic meltdown. Ethiopia must preserve the value of its USD holdings–or an equivalent reserve currency–in order to shield itself from hyperinflation at home.

And it’s getting much harder to do that–not just because of the Fed’s endless money-printing, but also the fact that Ethiopian Airlines, one of the country’s main earners of foreign currency, is facing an uncertain future thanks to covid-19.

With Ethiopia’s GDP rate now growing four times slower than its inflation rate, the country is staring default down the barrel of a gun.

So, what to do about it?

It could simply buy more dollars. That’s China’s approach: more than half of its $3.2tr worth of foreign exchange reserves is believed to be USD, which it uses to manipulate the USD/CNY exchange rate and keep exports rolling off the shelves.

Trouble is, developing nations like Ethiopia can’t afford to stack trillions of dollars.

That leaves three options: hope that America will stop debasing the world’s reserve currency; find new, reliable sources of USD; or, diversify the state’s holdings beyond dollars–preferably by acquiring an asset with a fixed supply that cannot be manipulated by foreign governments. Enter bitcoin.

“Adoption of bitcoin or cryptocurrency in general is scary for any government, but … our project mainly aims at exploring solutions to solve forex issues the government might be facing,” Project Mano asserted. “Since everything else they hold grows in supply–including gold–we are suggesting [they find] something that doesn’t grow, as an experiment.”

Project Mano’s long-term vision encompasses three spheres: mining bitcoin; holding bitcoin; and linking bitcoin to the birr.

The latter two would, in theory, solve the problem of a depreciating reserve currency–but only if bitcoin fulfills its promise and matures into a globally recognized asset class. That, the lobbyists admit, will be seen as a “gamble” by the government.

A safer bet is their proposal to mine and monetize bitcoin–particularly given Ethiopia’s unique energy landscape and developmental status.

A costly green revolution

The East African country has abundant supplies of renewable energy: 90% of its electricity is already powered by domestic hydroelectric plants, with the remainder largely coming from wind, solar and geothermal sources.

That’s just a fraction of its future potential. The government hopes to grow renewable generation capacity fivefold to 25,000 megawatts (MW) by 2037, of which 6,500MW will come from one flagship project: the Grand Ethiopian Renaissance Dam (GERD), situated in the Blue Nile River.

Read more »

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UPDATE: IMF Encourages Formation of Ethiopia Creditor Committee

“The IMF strongly encourages the swift formation of the creditor committee for Ethiopia to enable the timely delivery of the debt operation that Ethiopia is requesting," the spokesperson for the International Monetary Fund Gerry Rice said in a media release. (Getty Images)

Reuters

The International Monetary Fund said on Tuesday it “strongly encourages the swift formation” of a creditor committee for Ethiopia to enable timely debt relief.

The formation of the committee will help Ethiopia “create fiscal space for development spending and lower the risk of debt distress rating to ‘moderate’ by reprofiling debt service obligations,” IMF spokesman Gerry Rice said in a statement.

Related:

IMF Urges Swift Formation of Creditor Committee for Ethiopia

Press Release

IMF

July 6, 2021

Washington, DC: The following statement on Ethiopia was issued today by Gerry Rice, spokesperson for the International Monetary Fund:

“The IMF strongly encourages the swift formation of the creditor committee for Ethiopia to enable the timely delivery of the debt operation that Ethiopia is requesting.

“Ethiopia requested in February to G20 and Paris Club creditors to benefit from a debt operation under the G20 “Common Framework.” The authorities’ aim is to create fiscal space for development spending and lower the risk of debt distress rating to moderate by reprofiling debt service obligations. The formation of the committee will help Ethiopia in this regard.”

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Ethiopian Airlines Leads Africa in Passenger Traffic During the COVID Crisis

Ethiopian Airlines topped the list with the highest passenger traffic transported through Addis Ababa Bole Airport [in 2020]. A total of 5.5 million passengers have been transported through the airport. Of this traffic, Ethiopian transported 5.2 million passengers. - Travel Daily News. (Photo via @flyethiopian/Twitter)

Travel Daily News

Ethiopian continues to lead Africa in passenger traffic during the COVID crisis

ADDIS ABABA – Ethiopian Airlines Group has become Africa’s top airline in passenger traffic retaining its leadership position in the continent. According to the African Airlines Association’s (AFRAA) report, Ethiopian has been ranked first by passenger and cargo traffic in 2020.

Ethiopian Airlines Group CEO Mr. Tewolde GebreMariam said, “We are honoured to continue our leadership even during the Global Pandemic Crisis which has devastated the aviation industry. This is a manifestation of our resilience and agility. We are excited about the role we played in the fight against the pandemic by continuing our much-needed air connectivity within Africa and with the rest of the world without any flight suspension. We are saving lives through air transport of medical supplies and vaccines.”

Ethiopian Airlines topped the list with the highest passenger traffic transported through Addis Ababa Bole International Airport. A total of 5.5 million passengers have been transported through the airport. Of this traffic, Ethiopian transported 5.2 million passengers and the remaining passengers were transported by other airlines. Ethiopia also topped the list in the most connected countries in Africa due to Ethiopian Airlines’ large number of direct flights within the continent.

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BUSINESS: In Ethiopia, Abiy Tries to Charm Europe’s Top Pharmaceuticals

The Ethiopian government has made the pharmaceuticals sector one of its priorities and introduced financial incentives to lure foreign investors into the country, a bait that so far has only lured Asian groups. (Photo: Prime Minister Abiy Ahmed Ali. (© @AbiyAhmedAli/Twitter)

Africa Intelligence

Abiy tries to charm Europe’s top pharma groups

While most of Africa is encountering Covid-19 vaccine distribution difficulties, Ethiopia dreams of becoming a hub for the continent’s pharmaceutical industry. The country has listed the sector as a priority for its 2015-2025 second growth and transformation plan, GTP II, drawn up by the former prime minister Hailemariam Desalegn’s administration and taken on board by his successor Abiy Ahmed Ali.

Currently, Ethiopia imports 90% of its pharmaceutical products. The GTP II target is for 60% of the country’s needs to be met by local production and to attract at least 25 new investors that respect good manufacturing practices and three active ingredient production plants by 2025.

Asian investors

In September, Ethiopia revised its legislation on foreign investment, lifting all restrictions on the pharmaceutical sector. Since then, the Ethiopian Investment Commission, or EIC, hungry for technology transfers, has been actively working to bring in global players with attractive financial incentives.

So far, Ethiopia has struggled to land any of the European and US leaders, only catching African and Asian firms in its net. Inside the gates of Addis Ababa’s pharmaceutical industry-focussed Kilinto Industrial Park (KIP) there is a majority of Chinese and Indian name plaques. China’s Shanghai Pharmaceuticals Holding Co and Zhende Medical Co have pledged to invest $30m and $75m respectively in the zone, while Indian vaccine manufacturer Kilitch Drugs has promised to inject $35m. The KIP’s other main investors include Egypt’s Eva Pharma, for $21m, and Kenyan Dawa Group, for $13m.

Sights on Germany and the UK

These promises fulfil some of the goals set by the GTP II but will not satisfy the EIC, whose sights are set on Europe. For the better part of a year, the commission has been working to win over German groups including sector giant Merck. Talks are underway but nothing has come of them yet. One of the reasons holding these European players back is that Ethiopia’s infrastructure fails to match their standards for the moment.

The EIC is also keen to convince British firms to invest in its pharmaceuticals sector. Last week, the Ethiopian ambassador to the UK, Teferi Melesse-Desta, in collaboration with one of the EIC directors Aschalew Tadesse Mechesso, held a webinar with several dozen potential British investors.

Uncertain future

The only European player present in Ethiopia so far is 54 Capital, a private equity firm that in 2016 forked out $42m for a 40% share in the country’s largest producer Addis Pharmaceuticals Factory (APF, AI, 08/04/21). Though based in London, 54 Capital was founded by Moroccan business partners Saad Aouad and Yassine Benjelloun.

APF’s main production site is in Adigrat, a city in the Tigray region that is currently the theatre of a civil war between the federal army and regional rebel forces. Since the start of the conflict, Adigrat has been subject to heavy fighting and changed hands several times. The APF factory has become a focus of propaganda on both sides, jeopardising its production capacity.

Being cut off from its largest pharmaceuticals producer has made Ethiopia all the more impatient for new investors.

Related:

UPDATE: Ethiopia Launches Tender Process to Sell 40% Stake in Ethio Telecom

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Rolling Stone on Motown Records’ CEO Ethiopia Habtemariam

“We’re back at a place where we have to create the new generation of superstars,” says the newly promoted label chief. (Photo: Ethiopia Habtemariam by Bonnie Nichoalds)

Rolling Stone magazine

This story appears in Rolling Stone‘s 2021 Future of Music issue, a special project delving into the next era of the multibillion-dollar hitmaking business. Read the other stories here.

To reinvent Motown Records, Ethiopia Habtemariam wants to start by going back in time. “I remember being a really young kid and seeing how massive acts like Boyz II Men were, and how that was indicative to what Motown was like,” Habtemariam muses, noting that in the Sixties and Seventies, the label was a formidable launchpad for black artists to become global superstars.

Back then, Motown really had everything — a film and TV division, a comics team. Habtemariam, who has just been promoted to the company’s CEO and chair after spending the past decade ushering the legacy label out of the shadows, first as a VP and then as president, has a vision to bring that cross-platform entertainment brand back.

Under her leadership, Motown will find new revenue streams for its 50-year-old catalog of hits from the likes of the Jackson Five and the Supremes, while also seeking to break fresh rappers and R&B stars. It’ll continue to court partnerships with hot new labels like Quality Control and Blacksmith Records, two important relationships brokered by Habtemariam that have brought Migos, Lil Baby, Lil Yachty, Vince Staples, and City Girls on board. Hip-hop is the most commercially successful genre of music right now, and Motown is eager to take center stage in breaking the biggest rappers of tomorrow.

Habtemariam, an Atlanta native who started her music career as an intern at Atlanta-based LaFace Records more than two decades ago, is also well aware that she’s only the second woman, after Epic Records’ Sylvia Rhone, to lead a major record label — and so she’s got a second, unofficial job as a role model for the entire record business, which is undergoing seismic racial change for the first time in its own ranks. “I’m hoping this opens up the door for a lot more that happens for people that look like me, and have done the work, and deserve to grow to this level in their careers,” Habtemariam says.

In her new role helming Motown, she will also report directly to Universal Music’s CEO Sir Lucian Grainge, becoming one of only a handful of executives at the giant music company to do so. While Habtemariam doesn’t foresee hip-hop’s pull diminishing any time soon, she says the pandemic has underscored the wide swaths of music released every day online, and she expects a wider range of music to stick to the charts than before — meaning that Motown might expand its classic “Motown Sound” as well. “I think there’s going to be more cream rising to the top, great songs,” she says. “I don’t think it’ll be just one sound that dominates. People are looking for music that speaks to every bit of their emotions and what they go through.”

The seasoned exec believes the streaming era highlights, rather than threatens, the importance of labels to young artists. “It’s really competitive,” she says. “But our industry as a whole is in such a healthy place now. We’re back at a place where we have to create the new generation of superstars.”

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UPDATE: Ethiopia Launches Tender Process to Sell 40% Stake in Ethio Telecom

The telecoms business in Ethiopia, a country with a population of more than 100 million people and one of the region’s biggest economies, is considered lucrative and is expected to draw significant investor interest. (Reuters)

Reuters

ADDIS ABABA – Ethiopia on Monday launched a tendering process for the proposed sell-off of a 40% stake in state-owned carrier Ethio Telecom to private investors, part of the government’s broader plan to open up the Horn of Africa country’s economy.

Interested investors can now submit so called expressions of interest (EOI), the first of a series of stages that will lead to picking of a successful bidder, Zinabu Yirga, Deputy Director of Public Enterprises Holding and Administration Agency told a press conference in the capital Addis Ababa.

“The government want(s) state-owned enterprises to be competitive and productive,” Zinabu said, explaining the authorities’ motivation for selling a part of Ethio Telecom to private operators.

As part of the broader opening up of the sector, Ethiopia is also moving to license private operators to compete with Ethio Telecom.

Last month authorities handed out the first private operator licence to a consortium led by Kenya’s Safaricom, Vodafone, and Japan’s Sumitomo.

The telecoms business in Ethiopia, a country with a population of more than 100 million people and one of the region’s biggest economies, is considered lucrative and is expected to draw significant investor interest.

Brook Taye, senior advisor at the finance ministry said the 40% would be sold as a single stake to a single investor.

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Twitter Appointments Mimi Alemayehou to Board of Directors

Mimi Alemayehou's career spans both the public and private sectors across emerging markets. She currently serves as Senior Vice President for Public-Private Partnerships at Mastercard. Prior to joining Mastercard, Ms. Alemayehou was the Managing Director for Black Rhino Group. Ms. Alemayehou was previously appointed by President Barack Obama to serve as Executive Vice President of the Overseas Private Investment Corporation (OPIC). (Photo: Mastercard)

Press Release

Twitter Announces Appointment of Mimi Alemayehou and Departure of Jesse Cohn

Mimi Alemayehou to join the Board, bringing more than 20 years of investment and finance experience across emerging markets

News provided by Twitter, Inc.

SAN FRANCISCO — Twitter, Inc. (NYSE: TWTR) today announced the appointment of Mimi Alemayehou to the Company’s Board of Directors as a new independent director, effective immediately.

“Mimi’s extensive experience overseeing growth in emerging markets in both the public and private sectors will be invaluable as we advance Twitter’s mission to serve the public conversation across the world,” said Patrick Pichette, independent chair of the Twitter Board. “Mimi shares our commitment to social responsibility and strengthening global communities, and we’re eager to benefit from her perspective and regional expertise as we expand Twitter’s presence to Ghana and invest in improving our service across Africa and other regions.”

Ms. Alemayehou, who brings to Twitter’s Board more than 20 years of investment and finance experience across emerging markets, with a strong focus on Africa, said, “I have long respected Twitter’s focus on supporting the diverse global communities that drive public conversation, and am proud to join the team as they work to expand Twitter’s reach around the world. I look forward to working closely with Twitter’s management team and the rest of the Board to help oversee and execute the Company’s long-term growth objectives.” In her current role as Senior Vice President for Public-Private Partnerships at Mastercard, Ms. Alemayehou leads Mastercard’s partnerships with private foundations, international development organizations and non-governmental organizations with the objective of building commercially sustainable digital ecosystems that benefit everyone by advancing financial inclusion, transparency, support to humanitarian response and economic development.

In connection with Ms. Alemayehou’s appointment, Jesse Cohn will be stepping down after an important year on the Board. As one of Twitter’s largest shareholders, Elliott Investment Management will continue to engage with members of the Company’s senior management team and Board, facilitated by the Information Sharing and Engagement Agreement the Company entered into with Elliott.

Mr. Pichette continued, “On behalf of the Board, I want to thank Jesse for his support and contributions as a director. Over the past year, years of foundational work combined with a clear focus on growth and monetization paid off. The pace of innovation at Twitter has increased dramatically, the company is executing at a high level, and the vision of Twitter’s ecosystem value is being realized. We are grateful for Jesse’s insights and commitment to help strengthen Twitter over the course of this important year.”

Jack Dorsey, CEO of Twitter, said, “As we shared at our Analyst Day, we continue to build upon our strengths and are proud of our progress. We are appreciative of Jesse’s input and support during an important year for us.”

Jesse Cohn, Managing Partner at Elliott, said, “It’s been a pleasure to serve on Twitter’s Board during this remarkable period of progress for the company. Over the past year, thanks to the hard work of Twitter’s management team and Board, Twitter has improved operational execution, strengthened the Board’s governance, initiated a share repurchase program, established bold, multi-year performance goals, meaningfully accelerated its release of new products and monetization strategies, and intensified its focus on operational performance and shareholder value creation. Elliott remains one of the company’s largest shareholders, and I look forward to continuing to collaborate with Twitter’s management and Board as it executes on its vision.”

About Mimi Alemayehou

Mimi Alemayehou’s career spans both the public and private sectors across emerging markets. She currently serves as Senior Vice President for Public-Private Partnerships at Mastercard. Prior to joining Mastercard, Ms. Alemayehou was the Managing Director and a Board member for investment platform Black Rhino Group, a portfolio company of Blackstone, where she focused on the development and acquisition of energy and infrastructure assets across Africa. Ms. Alemayehou was previously appointed by President Barack Obama to serve as Executive Vice President of the Overseas Private Investment Corporation (OPIC). During Ms. Alemayehou’s tenure from 2010 to 2014, OPIC’s portfolio grew by more than 24% to $18 billion and the corporation’s Africa portfolio tripled to nearly $4 billion. Prior to OPIC, Ms. Alemayehou was appointed by President George W. Bush to serve as the United States Executive Director on the Board of Directors of the African Development Bank (AfDB). She received a Distinguished Honor Award for her outstanding service in this role. Ms. Alemayehou has also launched entrepreneurial ventures in consulting.

About Twitter, Inc.

Twitter (NYSE: TWTR) is what’s happening and what people are talking about right now. To learn more, visit about.twitter.com and follow @Twitter. Let’s Talk.

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UPDATE: Ethiopia Lost $500m on Telecom License Mobile-Money Move, PM Says

The block imposed will be lifted after about a year, Abiy said at the launch of Telebirr, a mobile-payments service. “This decision has cost us a high price. When it was decided to open up the telecom market about two years ago, one of the key areas of contention was the issue of mobile money.” (Photo: @ethiotelecom)

Bloomberg

Ethiopia’s decision to exclude mobile money from the terms of two new telecom licenses cost the government about $500 million from bid levels, Prime Minister Abiy Ahmed said.

The block imposed to allow the country to build its own expertise in phone-based financial technology will be lifted after about a year, Abiy said at the launch of Telebirr, a mobile-payments service. Ethio Telecom, the state-owned operator, will run Telebirr.

“This decision has cost us a high price,” the prime minister said. “When it was decided to open up the telecom market about two years ago, one of the key areas of contention was the issue of mobile money.”

The government has long been in the process of selling two new telecom licenses — a policy that’s at the heart of Abiy’s economic-reform plan. The move will open up one of the last major markets yet to welcome international investors, and is intended to trigger a wider privatization program to raise foreign-exchange and boost productivity.

The issue of mobile money has been vital to the progress of the auction. Financial technology is a major revenue and profit driver for African telecom operators, who are filling a gap left by traditional banks and taking advantage of soaring smartphone use.

“Though Ethiopian mobile penetration lags behind peers, investment and lowered prices should lead to strong growth in takeup of mobile services,” Bloomberg Intelligence analyst John Davies said in a note. “The value to international investors depends on agreements with the government and how it chooses to regulate the market.”

Ethiopia has received a license bid from a consortium including Vodafone Group Plc, Vodacom Group Ltd. and Kenya’s Safaricom Ltd. Another offer was made by MTN Group Ltd., Africa’s largest wireless carrier, and China’s Silk Road Fund.

The country is yet to announce the result.

Related:

UPDATE: Ethiopia’s state telecoms monopoly launches mobile money service

Reuters

ADDIS ABABA, May 11 (Reuters) – Ethiopia’s sole mobile operator, Ethio Telecom, launched a mobile phone-based financial service on Tuesday, seeking to boost growth by offering cashless transactions.

Mobile financial services have become a significant part of African telecom operators’ businesses since Kenya’s Safaricom pioneered them with M-Pesa in 2007, giving people an alternative to banks.

The new service, telebirr, will mark a shift for Ethiopia, where the banking system is seen as inefficient with 19 commercial banks serving a population of about 115 million.

State-owned Ethio said it would allow users to send and receive money, deposit or take out cash at appointed agents, pay bills to various merchants and receive cash sent from abroad.

The company aims to attract 21 million users for the service in its first year of operations, rising to 33 million in five years, said Chief Executive Frehiwot Tamiru.

About 40% to 50% of Ethiopia’s annual economic output will be transacted on the platform in five years, she said.

Its launch comes as the government prepares to sell a 45% stake in Ethio, part of a broader liberalisation including the auctioning of two new full service telecoms licences.

Only Ethio Telecom will be able to offer mobile financial services for now as foreign operators are currently barred by law from participating.

Prime Minister Abiy Ahmed said at a launch ceremony for telebirr that the government had foregone $500 million by denying bidders for the two licences the right to roll out mobile financial services.

“We expect Ethio Telecom to strive in a way to compensate this,” he said.

The prime minister said, however, that mobile financial services would be opened up to competition after a year.

He said telebirr would help provide formal financial services to those who do not have access to bank accounts.

It will also enhance security by discouraging criminals who target cash, said Mebratu Kassa, a cashier at the Lucky Cafe and Restaurant in the capital Addis Ababa.

“You sometimes don’t know if the note is counterfeited or not,” he said.

Ethio Telecom, which had revenue of 25.57 billion Ethiopian birr ($604 million) in the six months to the end of December 2020, has 50.7 million subscribers.

Apart from the Ethio stake sale, ending one of the world’s last closed telecoms markets, the government is looking more broadly to open up Ethiopia’s economy.

Shares in sugar factories are also being sold and tentative steps towards opening up the financial sector have been taken. ($1 = 42.3188 birr)

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In Ethiopia, Investment Bank Law May Herald Creation of Stock Exchange

A client uses an ATM at the Commercial Bank of Ethiopia in Addis Ababa. (Photo: Maheder Haileselassie Tadese/Reuters)

The Africa Report

Ethiopia has been progressively opening its banking sector since 2016. As the country moves ahead with its liberalization process under Abiy Ahmed’s leadership, the pace of reform has picked up. But with the recent flop of telecom privatization; partly because of fears around security, will financial sector opening fare differently? The fate of investment banks will be closely linked to moves to open an Ethiopian Stock exchange, and the wider privatization process.

Since 2018, the list of sectors open to foreign investment has expanded, including logistics and telecoms.

In February, the Ethiopian Parliament completed a draft law to allow partial foreign entry into the banking sector – a stark contrast to the government’s more hostile position a year ago

READ MORE Ethiopia further opens up sectors to diaspora and foreign nationals

What are the provisions of the draft law? How will it impact the banking sector? And what are its wider ramifications?

Slow to bloom

Ethiopia showed signs of opening its banking sector to foreigners in 2016 after adhering to the African Trade Insurance Agency (ATIA)

Backed by regional and international institutions, COMESA and the World Bank, the ATIA aims to attract foreign direct investment (FDI) by offering “ insurance against political upheaval, expropriation and problems with exchange controls on trade” as noted in The Economist.

Following this, nine foreign banks have opened liaison offices:

Read more »

Related:

UPDATE: Ethiopia Signs $907 Million Financing Pact With World Bank

UPDATE: IMF & World Bank Say Ethiopia’s Debt is Sustainable

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How Africa Is Getting Its Mobile Game On! Ethiopia’s Endless Creative Inspiration

In Ethiopia’s capital, Addis Ababa, a young gaming enthusiast is bringing more visibility to the industry. "University graduates are now actively pursuing game development as a career option," says Dawit Abraham, founder and CEO, Qene Game. (Getty Images)

Forbes Africa

In Africa, a new creative energy is seeing tech geeks give up their consoles and day jobs to take to full-time video game development. It’s not a level-playing field but they are engaging a growing hyper-connected audience.

THE YOUNGEST continent in the world has a new obsession – mobile gaming. What’s newer is local content created by Africans for Africa…

ETHIOPIA’S ENDLESS CREATIVE INSPIRATION


Dawit Abraham, founder and CEO of Qene Games. (Courtesy photo)

In Ethiopia’s capital, Addis Ababa, a young gaming enthusiast is bringing more visibility to the industry. Dawit Abraham is the founder and CEO of Qene Games. He is also a game developer and android application engineer.

“The industry in Ethiopia is still in its infancy with only a few active studios present. Ethiopia doesn’t have Google and Apple merchant accounts that would have allowed Ethiopian game developers to sell their games across the world. The industry is also yet to be recognized and supported by the government,” he tells FORBES AFRICA.

University graduates are now actively pursuing game development as a career option. – Dawit Abraham, founder and CEO, Qene Game

However, despite these challenges, the industry is alive and kicking. “Gaming communities actively get together and build games on hackathons and game jams. University graduates are now actively pursuing game development as a career option,” he says.

“Ethiopia, as a country with more than 3,000 years of history and culture, has a large pool for creative inspiration. From the artistic styles that have been around for millennia, unique music styles, and many fascinating legends and folklore, our game developers have an endless source to feed their creativity and imagination.”

Hubs of creativity and inspiration thus make countries like Ethiopia great places to begin when seeking ideas for original and unique games especially against the backdrop of the continent’s burgeoning creative economy. Abraham believes that as more publishers become interested in the African market, the more game developers and games we will see.

“I expect that we would see a rise in the number of mobile game developers and also the quality of games coming out of Africa. I also suspect there would be fierce competition among telcos (telecommunication operators) who have been trying to get into the gaming business to try to fill the gap in distribution and sales,” he says.

Augmentative Reality (AR) and Virtual Reality (VR) gaming experiences are also great opportunities for the African tourism industry to explore. Companies such as Guzo Tech in Ethiopia have received grants for their work in AR tourism showcasing the country’s historic sites.

Read the full article at forbesafrica.com »

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UPDATE: US-backed Vodafone & China-backed MTN are Only Bidders for Ethiopia

The Ministry of Finance sealed its doors when the 10:00 deadline for [telecoms licences] bids had expired, and said it would make a formal announcement after the technical and financial evaluation is completed. (Capacity Media)

Capacity Media

Ethiopia received just two bids, from MTN working China’s Silk Road Fund and a US-backed and Vodafone-led consortium, for its two telecoms licences this morning.

The Ministry of Finance sealed its doors (pictured) when the 10:00 deadline for bids had expired, and said it would make a formal announcement after the technical and financial evaluation is completed.

MTN made it clear that it is backed by the Silk Road Fund, a Chinese state-owned investment fund designed to foster increased investment in countries along the country’s One Belt, One Road, economic development project.

The Vodafone consortium is backed by the US government’s International Development Finance Corporation (IFC), which has given a loan of US$500 million, and the UK-backed CDC. The IFC earlier this year invested $300 million in Africa Data Centres, owned by Liquid Intelligent Technologies, formerly Liquid Telecom.

The US and UK financial backing would almosts certainly preclude the possibility of Vodafone using Huawei or ZTE technology for its bid.

Shameel Joosub, CEO of Vodacom group, said today: “We are submitting a strong tender as the Global Partnership for Ethiopia consortium led by Safaricom. It is never an easy job to open up a country’s telecom market, yet the Ethiopian government has managed to move forward with a large number of the regulations required for the benefit of 110 million Ethiopians. The country’s authorities have also repeatedly committed to create and maintain a level playing field for all, giving us confidence that the next round of regulations will be tackled as soon as possible. Our Global Partnership for Ethiopia has a unique mix of experience and know how to help transform Ethiopia into a modern digital economy and to positively impact the lives of Ethiopians.”

Balcha Reba, director general of the Ethiopian Communications Authority (ECA) issued a carefully written statement avoiding the clear fact that there were only two bids, despite two extensions of the deadline from an original date of 10 December 2020 in a process that was already months or years behind schedule.

The ECA held a virtual meeting in November 2020 at which 120 stakeholders took part. This “was an extension of the several months-long consultations as well as the Authority’s continued effort to ensure the process is achieved in a fair and transparent manner”, said the ECA at the time.

Now the ECA is putting a brave face on it, saying: “We are delighted to have had interest from established telecoms operators around the world.”

The ECA acknowledged that interest “in this unprecedented opportunity” was from companies “including … Africa’s two telecoms giants, MTN, the largest telecoms operator on the continent, and the Vodafone/Vodacom consortium, including Kenya’s largest telecoms provider, Safaricom.” But it named no other operators.

The Ministry of Finance also tweeted pictures of two executives, from MTN and the Vodafone group, signing documents in its headquarters, before adding a picture showing the doors sealed after the deadline passed.

The ministry said in the tweet accompanying the two pictures: “Delighted to have received the bids for the nationwide telecom service licenses from two giant telecom operators consortium of Safaricom (Kenya), Vodafone Group (UK), Vodacom Group (South Africa), CDC Group (UK), & Sumitomo Corporation (Japan) #MTN Group Limited.”

In February Vodafone told Capacity its Kenyan subsidiary Safaricom “will be the lead partner” in a bid for Ethiopia, working with its main shareholder, Vodacom of South Africa. Vodafone is the main shareholder in Vodacom. Vodafone told Capacity that technological support will come from Sumitomo, the Japanese company that has been working in Myanmar with KDDI and state-owned operator MPT.

Vodafone said this morning that it was checking the wording of the Ministry of Finance’s statement, to clarify whether there were just the two bidders.

MTN said in a statement this morning: “MTN Group confirms that it is participating with equity partners in a bid for a telecoms licence in Ethiopia, Africa’s second most-populous country which represents the last and largest telco liberalisation opportunity in the world.”

The group added: “Our participation is aligned with our strategy, Ambition 2025, focusing on capturing growth from digital acceleration across the continent. It has been made in partnership with Silk Road Fund from China. Other partners will be disclosed on a successful bid outcome.”

Ralph Mupita, president and CEO of MTN group, said: “Ethiopia provides the largest telecommunication and digital services growth opportunity in Africa over the medium term and fits into our pan-Africa focus and platform strategy. We are being guided by our capital allocation framework in our assessment of this opportunity.”

Orange is known to be interested in the Ethiopian market. However the government of Ethiopia has said it wants to sell shares in the current monopoly provider, Ethio Telecom, and is likely to bid for a stake. Orange in the past had a management contract with Ethio Telecom.

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UPDATE: IMF & World Bank Say Ethiopia’s Debt is Sustainable

In an initial assessment, the IMF and the World Bank concluded that Ethiopia’s debt is sustainable, according to the fund’s Africa department Director Abebe Aemro Selassie. The preliminary sustainability assessment is a key step for the Horn of Africa nation to rework its public debt under a Group-of-20 program to ease repayment burdens of poor countries hit by the coronavirus pandemic. (Getty Images)

Bloomberg News

Rescheduling Payments to Ease Ethiopia Debt Risks, IMF Says

Extending external-loan repayments over a longer period will help Ethiopia ease debt risks in the future, according to the International Monetary Fund

In an initial assessment, the IMF and the World Bank concluded that Ethiopia’s debt is sustainable, according to the fund’s Africa department Director Abebe Aemro Selassie. The preliminary sustainability assessment is a key step for the Horn of Africa nation to rework its public debt under a Group-of-20 program to ease repayment burdens of poor countries hit by the coronavirus pandemic.

Ethiopia, Chad and Zambia have signed up to the so-called G20 Common Framework, which is available for 72 of the world’s poorest countries.

Ethiopia’s debt is assessed to be sustainable, but a reprofiling of debt service in coming years over a longer period will enable a moderate risk of debt distress to be reached by the end of the Fund-supported program,” Selassie said in an interview. The IMF’s analysis of liquidity needs will help inform the country’s creditors committee, which hasn’t yet met, to decide on the type of debt relief.

Ethiopia’s Eurobonds tumbled after the country announced on Jan, 29 its intentions to restructure its external debt. State Minister for Finance Eyob Tekalign Tolina has said the country has not decided how Eurobond-holders will be treated, but vowed a “market-friendly” solution to guarantee access to markets in debt coming debts.

Yields on the nation’s 2024 Eurobonds fell 18 basis points on Thursday to a two-month low.

A new committee of official bilateral creditors of Chad will meet this week to start deliberations on that country’s request to restructure its external obligations, Abebe said. Under the program, debtors rework their credits with government lenders and are required to seek similar terms of the resulting bilateral restructuring with private creditors.

Commodity trader Glencore Plc is Chad’s largest private creditor, with an oil-backed facility worth more than $1 billion.

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UPDATE: Amole & Visa Partner to Expand Digital Payments in Ethiopia

Yemriu Chanyalew, CEO of Moneta Technologies that owns "Amole," Ethiopia’s largest mobile eWallet platform. (Photo via @myamole/Twitter)

PRWeb

Moneta Technologies “Amole” and Visa form Strategic Partnership to Expand Access to Digital Payments for Ethiopian Merchants and Banks

ADDIS ABEBA — At today’s event, Amole, Ethiopia’s largest mobile eWallet platform and Visa (NYSE: V), the global leader in digital payments, announced a strategic partnership and the launch of the Amole eCommerce Gateway, using Visa CyberSource infrastructure which supports digital payments for merchants and banks. Dashen Bank will be the first bank to use the Amole eCommerce Gateway making it the first Ethiopian bank to acquire all three major international cards (Visa, Mastercard and American Express).

With this strategic relationship, Amole and Visa will seek to eliminate barriers to regional and cross-border commerce and offer an expanded set of eCommerce capabilities to Amole merchants by enabling secure and convenient cashless payment solutions in Ethiopia and Kenya. Ethiopian banks licensed by international card associations can now use the Amole eCommerce Gateway to acquire international cards online on behalf of their merchants. The Amole eCommerce Gateway uses the Visa CyberSource infrastructure making it secure with fraud-monitoring systems to protect merchants from chargebacks.

“Today, with this partnership, we can accept digital payments from anywhere. As recently as 2018, a developer or business owner in Ethiopia did not have the ability to accept online payments until Amole introduced its open API platform in July 2018. We started Amole to become the payment and commerce platform to harness the great potential inherent in the B2B2C market that makes Ethiopia the sleeping giant,” said Yemiru Chanyalew Founder and CEO Moneta Technologies. The partnership will be a game changer for emerging Ethiopian exporters and online businesses along with Ethiopian Airlines logistics to fulfill Ethiopia’s aspiration to become the eCommerce hub of East Africa under the African Free Trade Agreement (“AfCFTA”). International payment receipt and cross-border international payment is now enabled, thanks to Amole.


Moneta becomes the first Fintech in Ethiopia to launch Visa CyberSource digital payment gateway for merchants and banks to drive cross-border eCommerce

Amole provides powerful APIs to help developers quickly build digital payments experiences online. With only a few lines of code, developers can create custom checkout experiences for Amole Wallet and Prepaid card. Other integrated features include, instantly send bulk transfers to Amole Wallets, online bill payments, airtime top-up, a marketplace of digital content, verify the identity of customers through verification APIs, and much more. Amole also supports localized payment channels, including mobile money, QR code, USSD, mobile app and Telegram Bot payments integrated to its mPOS platform at its 8000 merchants.

“Embracing digital payments and a potentially cashless society is where the future lies. Visa is investing more than ever in our global assets, infrastructure, and digital capabilities to reshape the future of commerce. For merchants, digital payments mean reducing costs associated with handling and losing cash and broadening their customer base as more and more people move away from cash. We are very proud to partner with Moneta Technologies “Amole” to ensure that the market enjoys a range of domestic and international benefits that will transform their e-commerce experience, said Abebe Girmay, Visa’s Country Lead for Ethiopia.

About Moneta Technologies

Moneta Technologies S.C. is a Fintech company, fully-owned subsidiary of Fettan Holdings, Limited of Kenya, the company is headquartered in Addis Ababa, Ethiopia. Moneta Payment solution is a secure and efficient payment platform that links consumers, banks, merchants, mobile content aggregators and service providers into an electronic payment ecosystem.

Moneta aims to deliver a collusive financial service to the unbanked and under-banked people of Ethiopia; enabling them access, aggregated financial services from their banks, service providers, agents and merchants at a single point of service. Our mission is to deliver an effective, efficient, reliable, accessible and secure payment system that is relevant to Ethiopia’s environment and fully supports the customer and the country’s needs.

About Visa

Visa (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network – enabling individuals, businesses and economies to strive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of digital commerce on any device for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit http://www.Visa.com

About Dashen Bank

Dashen Bank S.C. established on September 20, 1995 is the largest private bank and leading digital bank in Ethiopia, pioneered electronic banking in Ethiopia and is the only bank accepting the four payment card schemes (Amex, VISA, MasterCard, and UnionPay). For more information on Dashen, visit their website www,DashenBankSC.com.

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Business: Ethiopia Seeks Market-Friendly Solution to Debt Restructuring

Ethiopia's Minister for Finance Eyob Tekalign Tolina set out the state’s intentions on a call with investors on Thursday to discuss the proposed reorganization of Ethiopia’s loans under a Group-of-20 initiative. (Getty)

Bloomberg

By Alonso Soto and Samuel Gebre

Ethiopia’s government wants to find a “market friendly” solution for a planned debt restructuring to ensure it has access to the markets for more capital in coming years, State Minister for Finance Eyob Tekalign Tolina said.

Eyob set out the state’s intentions on a call with investors on Thursday to discuss the proposed reorganization of Ethiopia’s loans under a Group-of-20 initiative.

“We want this liability exercise to not affect our ability to raise more capital,” Eyob said by text message Friday. “It’s the government’s intention to “find a market friendly solution given Ethiopia’s interest to raise significant capital from the market in the next couple of years,” he said.

Yields on Ethiopia’s $1 billion of 2024 Eurobonds soared to nine-month highs after the government’s said on Jan. 29 it intends to restructure its external debt. The announcement led Fitch Ratings to downgrade the nation’s credit and warn of an increased risk of default.

Pandemic Fallout

Ethiopia, like other African nations, is looking to offset the fallout from the coronavirus pandemic on its economy. Its position has been exacerbated by fighting in the northern Tigray region and a border dispute with Sudan that’s disrupting trade flows.

Eyob said the state will pay a coupon on the debt that falls due in June.

Two investors who attended Thursday’s call said the government indicated it will include include Eurobonds in an overhaul of its external debt. That would mark a shift in the government’s position after the state earlier this year said it would only as a last resort include private creditors in the planned restructuring.

Eyob denied the government has made any decision on how Eurobond holders will be treated.

“There is no indication whatsoever from us one way or the other,” he said. “We did indicate that given the phrase ‘comparable treatment’ in the common framework, the issue may come up at the creditors committee,” Eyob said, adding that the government is awaiting advice from the Paris Club of creditors on the matter.

Yields on the 2024 dollar bonds dropped one basis point on Friday to 8.98%.

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CNBC Africa: Ethiopia’s Economy Grew by 6% Despite COVID-19 Shocks

"Six percent is a very good performance considering what was going on around the world," says Zemedeneh Negatu, Chairman of the U.S.-based Fairfax Africa Fund. (Image via CNBC)

CNBC Africa

Ethiopia’s economy grew by 6% despite COVID-19 shocks

Ethiopia’s economy grew by 6 per cent in the 2020 financial year despite the COVID-19 pandemic.

“Six percent is a very good performance considering what was going on around the world,” Zemedeneh Negatu, Chairman of the U.S.-based Fairfax Africa Fund, tells CNBC Africa.

What did Ethiopia do right?

“Last year [Ethiopia] took rapid early remedial actions against COVID and interestingly, according to the Prime Minister, they actually took a contrarian view to combat it,” Zemedeneh says. “They did not lockdown the economy although they did take measures to safeguard the public from the COVID pandemic.”

Zemedeneh adds: “Despite all kinds of other challenges for example the export market, flower and other things had slowed down globally, but sectors like mining did extremely well, very significant increase in mining gold and other things. The manufacturing [and] the agriculture sector had also performed well.”

Read more and watch the video at cnbcafrica.com »

Related:

Business: Ethiopian Economy Regaining Momentum in 2021

CNBC Africa

Fairfax Africa Fund Chair, Negatu sees Ethiopian economy regaining momentum in 2021

March 15th, 2021

Ethiopia’s economy saw a slowdown in the fourth quarter of 2020 despite the country having some of the laxest COVID-19 measures in the region.

“Overall considering what’s going on around the world and in Africa and based on data from the African Development Bank and IMF comparatively speaking Ethiopia is doing better than most African countries [and regaining its momentum],” says Chairman of the U.S.-based Fairfax Africa Fund Zemedeneh Negatu.

Read more and watch the video at cnbcafrica.com »

African Development Bank: African Economic Outlook 2021

Recent macroeconomic and financial developments in Ethiopia

Ethiopia’s economy grew by 6.1% in 2020, down from 8.4% in 2019, largely because of the COVID–19 pandemic. Growth was led by the services and industry sectors, whereas the hospitability, transport, and communications sectors were adversely affected by the pandemic and the associated containment measures to prevent the spread of the virus. The fiscal deficit, including grants, increased slightly during 2020, financed mainly by treasury bills. Tax revenue increased by 16%, but the tax-to-GDP ratio declined to 9.2% in 2020 from 10% in 2019 due to delayed implementation of tax reforms. Total public spending remained stable, in line with the country’s fiscal consolidation strategy.

In 2020 inflation reached 20.6%, well above the 8% target, due to pandemic-induced supply chain disruptions and expansionary monetary policy. In November 2020, the official exchange rate was devalued by about 8% to 35.0 birr per US dollar. Export revenues increased by 12% in 2020, as exports of gold, flowers, coffee, and chat increased while imports declined by 8.1%. This helped narrow the current account deficit to 4.4% in 2020 from 5.3% in 2019. Service sector exports declined by about 6%, mostly because of lower revenue from Ethiopian Airlines. Foreign direct investment (FDI) fell 20% to 2.2% of GDP, and personal remittances declined by 10% to 5.3% of GDP. Poverty was projected to decline from 23.5% in 2016 to 19% by end of 2020. But pandemic-driven job losses, estimated at as many as 2.5 million, will impede poverty reduction.

Outlook and risks

The medium-term economic outlook is contingent on the resolution of the COVID–19 crisis, the pace of the economic recovery, and such other shocks as civil strife and climate change. Real GDP growth in 2021 is projected to fall to 2%, then recover to about 8% in 2022, led by a rebound in industry and services. Monetary policy is expected to remain flexible in response to the government’s financing requirements. Increased use of open-market operations is expected to reduce inflation gradually. The fiscal deficit is projected to increase as tax policy reforms are delayed due to COVID–19. The current account is likely to deteriorate in 2021 before improving in 2022 as service exports gradually pick up. The key downside risks to the economic outlook include low investor confidence, in part due to sporadic domestic conflicts, weakness in global growth, and climate change.

Financing issues and options

Ethiopia’s financing requirements are significant given its large physical and social infrastructure needs and low tax-to-GDP ratio, which averaged 10% from 2017 to 2020. The primary deficit plus debt service was estimated at nearly 4% of GDP. As of June 2020, total public debt was about 57% of GDP, slightly more than half of which was external. Since 2017, Ethiopia has been classified at high risk of public debt distress due to weak export performance coupled with increased import-intensive public infrastructure investments. The International Monetary Fund’s 2019 debt sustainability analysis estimated the net present value of debt-to-exports at 247.6% and debt service-to-exports at 24.6%; the highest sustainable levels are 180% and 15%, respectively. Ethiopia benefited from the G20 Debt Service Suspension Initiative, and the government is taking measures to contain the debt burden as part of the so-called Home-Grown Economic Reform agenda, which includes fiscal consolidation, expanding public financing sources, a moratorium on nonconcessional borrowing, harnessing grants and concessional loans, and debt restructuring. Gross reserves amounted to $3.1 billion in 2020, or 2.5 months of imports and are unlikely to provide an alternative source of development financing in the short term. Expansion of public debt in the context of large public expenditure requirements could constrict the fiscal space and lead to repayment risks, especially since $1 billion in eurobonds come due in December 2024. Further reforms in public finance and investment management are needed to improve the efficiency of public expenditures.

Read the full report »

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Chef Shumu Adem’s Journey From Ethiopia to America’s Heartland

Shimelis "Shumu" Adem is the executive chef at Lucas Oil Stadium and the Indiana Convention Center. CENTERPLATE

Forbes

Chef Shumu Adem’s Journey From Ethiopia To The Final Four

Ethiopia was in chaos. In 1974, Emperor Haile Selassie was overthrown and the Ethiopian monarchy was abolished. Military leaders responsible for the coup not only sought to consolidate power, but also to eliminate any and all opposition.

From 1976-78, the Red Terror reigned throughout the African nation, particularly in major cities including the capital of Addis Ababa, targeting members and supporters of the Ethopian People’s Revolutionary Party (EPRP). Homes were searched and people, many of whom were students, were detained, tortured and executed without trial or cause.

One of the most systematic uses of mass murder by the state ever witnessed in Africa resulted in at least 10,000 deaths, though the total death toll is still unknown to this day.

“When I saw my friends starting to get arrested, I decided to flee Ethiopia to try to forge a future for myself,” said Shimelis “Shumu” Adem, executive chef at Lucas Oil Stadium and Indiana Convention Center.

In 1977, at the height of the Red Terror, Adem sought refuge at a convent in neighboring Djibouti. For the next three years Adem, who was equally as intrigued with taste and texture as he was bucking the cultural trend that only Ethiopian women were permitted in the kitchen, honed his culinary craft by cooking for a dozen nuns as well as other workers and residents of the convent, including fellow Ethiopian refugees.

Despite not speaking French, Adem communicated with two British nuns and one from Ethiopia during this time there, where he was taught French and Italian cuisine.

“The experience was great,” Adem said. “It made me decide to continue my future career in the culinary arts. I look back at this time fondly, and value it as a foundational pillar to making me the chef I am today.

“At its core, I am still doing the same thing now as I was then—helping make the time people spend together more memorable.”

Adem came to the United States in 1980 to create his own American Dream. Over the next 25 years, he worked in a variety of roles up and down the East Coast including in Baltimore and Philadelphia, serving as executive sous chef at the Pennsylvania Convention Center. He received his Pro Chef Certification Level III from the Culinary Institute of America in February 2004, and three years later moved to Indianapolis for a new opportunity.

Today, Adem is the executive chef at Lucas Oil Stadium, home to the Indianapolis Colts, and the Indiana Convention Center. Through the venues’ food and beverage provider Centerplate, Adem has developed, led and executed the culinary programs for major sporting events including Super Bowl XLVI, Big Ten Championship Game, NCAA Final Four (2010, 2015) and NFL Combine.


Chef Shumu CENTERPLATE

His two venues will serve as focal points for the upcoming NCAA Men’s Basketball Tournament, with the First Four to be played March 17. Lucas Oil Stadium will host the Elite Eight (March 29-30), Final Four (April 3) and Championship Game (April 5), while the one-million-square-foot Indiana Convention Center will be used as a practice facility with 12 courts set up inside the venue.

“No matter the event, the approach stays the same—paying attention to detail, tapping into our local suppliers and delivering creative menus that delight the guests who come to eat with us,” Adem said. “To borrow a basketball term, that’s the game plan for success.”

Adem said he and his team have utilized the learnings over the past year during the ongoing coronavirus pandemic to safely provide food and beverage offerings for players, staff and fans; the NCAA in February confirmed venues will operate at 25% capacity and all attendees are required to wear face masks and practice social distancing.

For the NCAA Tournament, all points of sale will be cashless to reduce contact, while condiment stands in the concourse and vendors walking up and down aisles are eliminated. Pre-packaged items will be available in all-inclusive clubs in lieu of buffets. All food service employees are required to wear gloves and masks, while social distance markings will promote distancing guidelines in common areas.


The half-pound bracket burger is a double cheeseburger topped with house-made applewood smoked bacon … [+] CENTERPLATE

Not only will Adem and Co. be whipping up fan favorites including Indiana whiskey sour pork wings and the Heartland beer cheese steak sandwich, the chef is compiling digital recipe cards featuring the house-made whiskey and orange marmalade, mango habanero madness sauce and applewood smoked bacon jam for fans watching at home.

“From my experience, my advice for young chefs is to set your future goal now,” Adem said. “Connect with chefs that can help you achieve your goal and always have a positive attitude. Understand you are learning not only from the chefs in your field, but also from everyone around you. Do not ever think you’re above learning. Do not be afraid to try new skills or cuisines. Develop and hone your own personal style.”

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Business: Ethiopian Economy Regaining Momentum in 2021

Based on data from the African Development Bank and IMF "comparatively speaking Ethiopia is doing better than most African countries [and regaining its momentum]," Chairman of the U.S.-based Fairfax Africa Fund Zemedeneh Negatu tells CNBC. (Image via CNBC Africa)

CNBC Africa

Fairfax Africa Fund Chair, Negatu sees Ethiopian economy regaining momentum in 2021

Ethiopia’s economy saw a slowdown in the fourth quarter of 2020 despite the country having some of the laxest COVID-19 measures in the region.

“Overall considering what’s going on around the world and in Africa and based on data from the African Development Bank and IMF comparatively speaking Ethiopia is doing better than most African countries [and regaining its momentum],” says Chairman of the U.S.-based Fairfax Africa Fund Zemedeneh Negatu.

Read more and watch the video at cnbcafrica.com »

Related:

African Development Bank: African Economic Outlook 2021

Recent macroeconomic and financial developments in Ethiopia

Ethiopia’s economy grew by 6.1% in 2020, down from 8.4% in 2019, largely because of the COVID–19 pandemic. Growth was led by the services and industry sectors, whereas the hospitability, transport, and communications sectors were adversely affected by the pandemic and the associated containment measures to prevent the spread of the virus. The fiscal deficit, including grants, increased slightly during 2020, financed mainly by treasury bills. Tax revenue increased by 16%, but the tax-to-GDP ratio declined to 9.2% in 2020 from 10% in 2019 due to delayed implementation of tax reforms. Total public spending remained stable, in line with the country’s fiscal consolidation strategy.

In 2020 inflation reached 20.6%, well above the 8% target, due to pandemic-induced supply chain disruptions and expansionary monetary policy. In November 2020, the official exchange rate was devalued by about 8% to 35.0 birr per US dollar. Export revenues increased by 12% in 2020, as exports of gold, flowers, coffee, and chat increased while imports declined by 8.1%. This helped narrow the current account deficit to 4.4% in 2020 from 5.3% in 2019. Service sector exports declined by about 6%, mostly because of lower revenue from Ethiopian Airlines. Foreign direct investment (FDI) fell 20% to 2.2% of GDP, and personal remittances declined by 10% to 5.3% of GDP. Poverty was projected to decline from 23.5% in 2016 to 19% by end of 2020. But pandemic-driven job losses, estimated at as many as 2.5 million, will impede poverty reduction.

Outlook and risks

The medium-term economic outlook is contingent on the resolution of the COVID–19 crisis, the pace of the economic recovery, and such other shocks as civil strife and climate change. Real GDP growth in 2021 is projected to fall to 2%, then recover to about 8% in 2022, led by a rebound in industry and services. Monetary policy is expected to remain flexible in response to the government’s financing requirements. Increased use of open-market operations is expected to reduce inflation gradually. The fiscal deficit is projected to increase as tax policy reforms are delayed due to COVID–19. The current account is likely to deteriorate in 2021 before improving in 2022 as service exports gradually pick up. The key downside risks to the economic outlook include low investor confidence, in part due to sporadic domestic conflicts, weakness in global growth, and climate change.

Financing issues and options

Ethiopia’s financing requirements are significant given its large physical and social infrastructure needs and low tax-to-GDP ratio, which averaged 10% from 2017 to 2020. The primary deficit plus debt service was estimated at nearly 4% of GDP. As of June 2020, total public debt was about 57% of GDP, slightly more than half of which was external. Since 2017, Ethiopia has been classified at high risk of public debt distress due to weak export performance coupled with increased import-intensive public infrastructure investments. The International Monetary Fund’s 2019 debt sustainability analysis estimated the net present value of debt-to-exports at 247.6% and debt service-to-exports at 24.6%; the highest sustainable levels are 180% and 15%, respectively. Ethiopia benefited from the G20 Debt Service Suspension Initiative, and the government is taking measures to contain the debt burden as part of the so-called Home-Grown Economic Reform agenda, which includes fiscal consolidation, expanding public financing sources, a moratorium on nonconcessional borrowing, harnessing grants and concessional loans, and debt restructuring. Gross reserves amounted to $3.1 billion in 2020, or 2.5 months of imports and are unlikely to provide an alternative source of development financing in the short term. Expansion of public debt in the context of large public expenditure requirements could constrict the fiscal space and lead to repayment risks, especially since $1 billion in eurobonds come due in December 2024. Further reforms in public finance and investment management are needed to improve the efficiency of public expenditures.

Read the full report »

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UPDATE: U.S. Company Visa Ready To Digitize Payments In Ethiopia

Marking a one-year anniversary since opening its Addis Ababa office, the U.S. company announced a series of partnerships during its inaugural Ethiopian Visa Payments Forum. The event brought together key stakeholders from the digital payments industry to explore opportunities to further advance Ethiopia’s growing payments ecosystem. (CIO East Africa)

CIO

By Staff Writer

Visa Affirms Commitment To Digitise Payments In Ethiopia During Inaugural Visa Payments Forum

Digitised payments are coming to Ethiopia soon.

Visa Inc, the leading global payments technology company, has affirmed its commitment to expanding digital payments in Ethiopia by working closely with the financial ecosystem to bring the benefits of digital commerce and money movement to consumers, merchants, financial institutions and government partners.

Marking a one-year anniversary since opening its Addis Ababa office, the company announced a series of partnerships during its inaugural Ethiopian Visa Payments Forum. The event brought together key stakeholders from the digital payments industry to explore opportunities to further advance Ethiopia’s growing payments ecosystem.

Over the past year, Visa has been building and strengthening partnerships and agreements that will accelerate digital payments, including:

– An agreement with Ethiopian Airlines to launch a co-branded card to ShebaMiles members across the Continent.

– An agreement and introduction with Bank of Abyssinia and Dashen Bank/Moneta (Amole) Technologies focused on supporting eCommerce growth and enabling wider acceptance of digital payments.

– A partnership with leading fintech Kifiya Financial Technology, providing local digital payments across mobile and online payments.

– Partnership with BelCash Technologies that will support the development of cross-border payment solutions for the East-African financial institutions and helping grow eCommerce to unlock the country’s digital potential.

– Licensing partnership with Cooperative bank & Oromia International Bank.

In addition to partnerships, Visa outlined two previously announced initiatives to drive financial inclusion and job creation within Ethiopia with STEMPower, and to support the development of innovative fintechs with its Visa Everywhere Initiative.

“At Visa, we are extremely pleased to have a local presence in one of the most exciting countries in Africa, and to have established strong partnerships to help enable digital commerce. We are excited to support the goals of the Ethiopian economy, where financial inclusion will play an important part in the overall growth journey. We see great tremendous opportunity and are committed to playing our part in bringing more people into the financial system and supporting economic progress,” said Aida Diarra, Senior Vice President & Head of Visa in Sub Saharan Africa.

As a sign of commitment to the digital transformation agenda, the Ethiopian government outlined Ethiopia’s first Digital Transformation Strategy, in June 2020, followed by a series of regulations for its implementation including the proclamation on Electronic Transactions.

“Fast-tracking digitization of payments has multiple benefits for Ethiopians. Enhanced digital infrastructure enables support to local people and small businesses to enjoy the fast, seamless and secure payment experiences that we know are so important. Digitizing payments can also play an important part in driving economic inclusion, which underpins sustained economic growth,” added Diarra.

Related:

In Ethiopia ArifPay Closes A $3.5 M Private Placement Round From 31 Investors

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Business: In Ethiopia ArifPay Raises $3.5m, Taxi-hailing Company ‘Feres’ Launches E-commerce Service Called ‘Feresegna’

ArifPay is a mobile point of sale system which will allow ATM cardholders to make electronic transactions via their smartphones. (Shega Media)

Shega

ArifPay Closes A $3.5 M Private Placement Round From 31 Investors

ArifPay ( ArifPay Financial Technologies Share Company ), an upcoming fintech company in Ethiopia, raised $3.5M / 140M ETB from 31 investors in a private placement round. From the total raised capital, the paid capital is $1M while the rest $2.5M is a subscribed capital. Investors are expected to pay the subscribed capital in the period of 2 years.

ArifPay is a mobile point of sale system which will allow ATM cardholders to make electronic transactions via their smartphones.

The company intends to launch M-pos and gateway-related digital financial products. It aims to allow people to use their mobile phones for conducting financial services including payments.

ArifPay sold 140,000 shares to the 31 investors with each share having a value of 1000 ETB. The shares are sold in a primary market. However, this was not a public offering rather a private placement as ArifPay hasn’t made a call to the public to buy the shares. The company plans to raise a fund through a public offering in the coming years. All investors are Ethiopian or Ethiopian Born Foreign Nationals as National Bank doesn’t allow non-Ethiopian foreign citizens to invest in Ethiopia’s financial sector.

ArifPay is founded by similar founders of Zay Ride, which is one of the pioneer ride-hailing platforms in Ethiopia.

Speaking to Shega about the fundraising, Habtamu Tadesse, Founder, and CEO of ArifPay said, ” We are able to raise $3.5M from 31 shareholders within a short period of time. We believe ArifPay will change the financial industry for the better.”

ArifPay is currently in the process to receive a Payment System Operator License ( For POS and Online gateway business ) from the National Bank of Ethiopia. ArifPay aims to launch its services by the end of May 2021.

Officially referred to as “Licensing and Authorization of Payment System Operators Directive (ONPS/02/2020), It is remembered that National Bank has issued a new directive that allows non-traditional financial institutions also known as financial technology (Fintech) companies to start offering payment processing and related services in the Ethiopia market by acquiring a payment system operator license issued by the regulator.

There are five licenses under the payment system operator directive. These licenses are National Switch, Switch Operator, ATM operator, POS operator, and payment gateway license. Read Our Guide: How to Get Started As A Payment System Operator in Ethiopia

In a statement sent to Shega, the company said, “Once operational, ArifPay aspires to make a significant contribution to the financial sector by offering digital-based payments services that meet the needs of consumers and merchants towards cash-lite transactions in line with the national agenda of the digital economy.”

Related:

Feres to Expand to the Ecommerce Space


Taxi-hailing Company ‘Feres’ launches an e-commerce service called Feresegna. (Shega Media)

Shega

Feres, a taxi-hailing company that has become a major player in the ride-hailing sector after joining the market a year ago is now moving to the e-commerce space and is launching an online marketplace and delivery service.

The platform is called Feresegna. Feresegna is a new e-commerce and delivery service that plans to join the market with different value-added features. Feresegna is a sister brand of Feres. Feres will be taking over the logistics and delivery side while E-birr serves as a payment solution.

Ebirr which is the latest entrant to the mobile money space in Ethiopia is also integrated with Feres and claims to have 2 million users, 15,000 + and 5000 + Agents and resellers.

Feresegna aims to capitalize on Fere’s driver and cab network to deliver orders to the customer.

Semir Nasir, Feresgnya manager says, “Feresegna, after understanding the growing demand of the eCommerce, the delivery service and the limitation of the options provided, is planning to join the market and fill the gaps between the huge demand and few offer.”

Feresegna will be a marketplace for merchants and plans to provide access to an online shop for businesses that are offline. In the new platform, Online shop is going to be anything from restaurants to apparel stores.

Semir added, “With the services we are planning to offer, that is tech efficient, fast, and effective; we plan to create many job opportunities, create accessible products for customers and be a platform for local business.”

Fersegna will first start delivering in Addis Abeba and aim to cover other cities outside of the capital soon.

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Video: Professor Lemma Senbet Explains Africa’s New Free Trade Area

Dr. Lemma W. Senbet is the William E. Mayer Chair Professor of Finance at the University of Maryland, College Park. In this video, which is part of the University's 'Global Pulse' series released this week, Professor Lemma explains the new Africa Continental Free Trade Area. (Photo: Smith Business School)

Smith Business School

The Global Pulse is a short, 2-3 minute video series released on Wednesdays featuring Maryland Smith faculty who break down a trending global topic and why it matters to you.

In the following video Lemma Senbet, William E. Mayer Chair professor of finance, outlines the details of the AfCFTA, or the Africa Continental Free Trade Area, and what it means for both the present and future of the continent.

Watch: Global Pulse: Africa’s New Free Trade Area

Related:

Profile: Professor Lemma Senbet’s Uncharted Journey


Dr. Lemma W. Senbet is the William E. Mayer Chair Professor of Finance at the University of Maryland, College Park. Beyond his academic career, Professor Lemma has been an influential member of the global finance community. He has advised the World Bank, IMF, the UN and other international institutions on issues of financial sector reform and capital market development. (Photo: UMD)

University at Buffalo

As the William E. Mayer Chair Professor of Finance, Lemma Senbet, PhD ’76, has helped transform the finance program at the University of Maryland into one of the best in the world.

He’s made such an impact that the Smith School of Business at the University of Maryland recently named an undergraduate finance program after him—The Lemma Senbet Fund, which gives undergrads hands-on experience in portfolio management and equity analysis.

But Senbet never planned to earn a PhD. He came to the U.S. from Ethiopia to earn an MBA at UCLA, which he selected because they offered a fast-track program he could complete in a year and keep his expenses down.

Senbet had planned to go home after completing his MBA, but didn’t want to leave after just one year in the U.S. Determined to find a way to earn an income so he could stay another year, Senbet turned to a trusted professor at UCLA who encouraged him to pursue a PhD.

“I got accepted to the PhD program at UCLA, but there wasn’t much money for students,” says Senbet. “So, I went back to my professor and he told me that Governor Rockefeller was handing out tuition waivers to foreign students, and encouraged me to apply to a finance program in New York—particularly UB.”

He got accepted into Columbia University and the University at Buffalo, but decided UB was the better fit. Still, he wasn’t fully committed to spending three or four years in a doctoral program, since he had passion to go back home. But civil unrest in Ethiopia forced him to stay longer in the program.

“This path turned out to be the correct one,” he says. “I didn’t know it then, but UB had one of the best finance programs—better than the Big Ten schools at the time. But since the program was so small, we got very close mentorship. We were like colleagues with faculty.”

After earning his doctorate, Senbet joined the University of Wisconsin–Madison as an assistant professor of finance. There, he progressed rapidly along the tenure track, earning the rank of full professor after just seven years, followed by the Charles Albright Chaired Professorship, before joining the University of Maryland.

Beyond his academic career, Senbet has been an influential member of the global finance community. He has advised the World Bank, the International Monetary Fund, the United Nations and other international institutions on issues of financial sector reform and capital market development. He is a past president of the Western Finance Association and a two-time director of the American Finance Association.

He also took a five-year leave from the University of Maryland to serve as executive director and CEO of the African Economic Research Consortium, the largest and oldest economic research and training network in Africa. He is succeeded by the former governor of the Central Bank of Kenya.

Senbet has received numerous recognitions for his impact on the profession. In 2000 he was inducted into the Financial Economists Roundtable, was named a Fellow of the Financial Management Association International in 2006 and was awarded an honorary doctorate by Addis Ababa University in 2005. In 2012, he was awarded the Ethiopian Diaspora (SEED) award for exemplary lifetime achievements and community service.

Throughout his career, Senbet has mentored a generation of doctoral students who have become distinguished professors around the country, including at Carnegie Mellon University and Vanderbilt University.

“So, UB has PhD ‘grandchildren’ so to speak,” he says.

When his students come to him seeking advice about what to do in their life, Senbet offers a simple response: Do your best.

“You don’t know where an opportunity will lead or who is watching you,” he says. “This uncharted journey has defined my life—from my college major to Wisconsin to Maryland to Africa. No matter what path is given to you—whether by luck or by plan—give it your all.”

Related:

COVID-19 & Its Impact on Africa: Q&A with Prof. Lemma Senbet

Brookings Institution Appoints Lemma Senbet to Africa Board

Professor Lemma Senbet Focuses on Ethiopian Diaspora After Successfully Leading AERC

Professor Lemma Senbet Leads AERC to Top Global Index Ranking

Tadias Interview with Professor Lemma Senbet: New Head of African Economic Research Consortium

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Video: The Ethiopian Food Truck In Denver

Established in 2015, The Ethiopian Food Truck is the first Ethiopian Food Truck in Colorado serving the Denver-Metro area. (Photo: konjoethiopianfood.com)

KWGN-TV

Yoseph Assefa and Fetien Gebre-Michale created the Ethiopian Food Truck back in 2015 and it was the first Ethiopian food truck in Colorado serving traditional recipes fresh and quick all over the Denver metro area.

The colorful menu features some of the mos popular Ethiopian vegetarian dishes alongside chicken and beef options.

You can find out where the Ethiopian Food Truck is by following them on their website at konjoethiopianfood.com/food-truck.

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Q&A: Amen Temesgen, Founder of BeNu Foods, on His Ethiopian Startup Business

Ethiopian company BeNu Foods, founded in 2018, produces nutritious biscuits from local raw materials. Founder Amen Temesgen (27) answers our questions. (How We Made It in Africa)

How We Made It in Africa

High-protein biscuits: Ethiopian food startup founder gives snapshot of his business

1. Give us your elevator pitch.

BeNu Foods is a startup that aims to tackle malnutrition in Ethiopia by manufacturingnutritious, high-protein BeNu biscuits for kids.

Ethiopia severely lacks affordable protein-rich products. Two out of five children in Ethiopia are undernourished and the country loses a staggering 17% of its GDP due to malnutrition. BeNu aims to tackle this problem with an integrated approach that brings together different stakeholders in the food sector.

2. How did you finance your startup?

My co-founder and I initially put in a small amount of money. Although access to finance has remained a great challenge, we raised funds from different organisations and individuals like Reach for Change Ethiopia.

3. If you were given $1 million to invest in your company now, where would it go?

Part of it would go towards R&D facilities where we could develop, design and manufacture on a small scale to test our products. Part of it would go to establishing a distribution chain and a small portion would help strengthen the digital platform we are developing to revitalise and enable different stakeholders in the food sector to work in partnership.

4. What risks does your business face?

Our sector is a low-risk one. But what has been a challenge is the unpredictable inflation of raw materials. It makes it harder to determine prices and to have a stable operation.


BeNu Foods’ biscuits

5. So far, what has proven to be the most successful form of marketing?

Word of mouth. Our pilot project was on a Melka Oba School feeding programme with an American donor and we recorded tremendous results like illness reduction, improvement in academic performance and class attendance. The fact that we had a proven pilot project enabled us to receive interest from places we didn’t even expect like Nicaragua.

6. Describe your most exciting entrepreneurial moment.

Just days ago, we received a confirmation of the caloric content of our product. Before this, our claims were from our own analysis. According to recent results from a top laboratory, we learnt our product is 548Kcal/100g with 25% protein content. To put things into perspective, a child would get their protein requirement for an entire day. This is crucial information for me and those we need to reach out to in the future.

7. Tell us about your biggest mistake and what you’ve learnt from it?

Eighteen months ago, we received an urgent order and didn’t have the manufacturing capacity. We approached an accomplished manufacturer who informed us that with his baking machine, he could meet our production needs. We went ahead and scheduled production without checking his machine or organising the delivery logistics beforehand.

Our delivery was supposed to be on a Tuesday and the manufacturer seemed confident he would meet the delivery timelines but by the Sunday, it was clear it was not going to happen. We had to find another manufacturing facility in our neighbourhood and do the production overnight.

We learnt to ensure any business is formalised and we always do our due diligence before we go ahead with orders.

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UPDATE: IMF Backs Ethiopia’s Plan to Rework Debt Under G-20 Framework

The International Monetary Fund (IMF) headquarters in Washington, D.C. (Getty Images)

Bloomberg

By Samuel Gebre

The International Monetary Fund backed Ethiopia’s plan to rework its debt under the Group of 20 common framework as it reached a staff-level agreement with the government on credit facilities.

To strengthen debt sustainability, the authorities aim to lower the risk of debt distress rating to moderate by re-profiling debt service obligations,” the lender said in an emailed statement on Tuesday. “In this context, the fund welcomes Ethiopia’s request for debt treatment under the G20 Common Framework.”

Ethiopia announced plans last month to rework its liabilities under the G-20 program that seeks to include private creditors into an agreement on debt relief for countries that need it following the fallout from the coronavirus pandemic. The nation’s Eurobonds plunged the most on record following the revelation, and then partly recovered after the government said it would only approach private creditors as a last resort.

Ethiopia Eurobonds Plunge as Nation Seeks G-20 Debt Review The IMF reached a staff-level agreement with Ethiopia on policy measures for the completion of the first and second reviews under the Extended Credit Facility and Extended Fund Facility arrangements, according to the statement. “Risks to the economic outlook are tilted to the downside,” the IMF said, projecting economic growth of 2% in 2020-21 and 8.7% in the following fiscal year.

Several economic and political uncertainties have hit the Horn of Africa nation from the pandemic to war in the northern Tigray region and a desert locust invasion. “A modest fiscal expansion is envisaged this fiscal year to accommodate the humanitarian assistance and reconstruction needs,” Sonali Jain-Chandra. who led the IMF staff team, said in the statement. “At the same time, the authorities are now moving to enhance domestic revenue mobilization.”

Related:

IMF, Ethiopia agree framework for loan deal reviews


The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. (REUTERS Photo)

Reuters

Updated: February 24th, 2021

NAIROBI (Reuters) – The International Monetary Fund said on Tuesday it had agreed a blueprint for the completion of reviews of Ethiopia’s loan programme, taking account of the impact of the coronavirus and the country’s “domestic security situation”.

The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Agreed in December 2019, the three-year programme is worth $2.9 billion. Performance under it has been strong, the IMF said.

The reviews, whose timetable the fund did not outline, were “focused on balancing the need to address ongoing challenges created by the pandemic and domestic security” while laying the foundation for growth, IMF Deputy Division Chief Sonali Jain-Chandra said in a statement

The security situation “has created humanitarian and reconstruction needs that require an adjustment of policies and support from the international community,” she added.

The statement made no direct reference to the war that began in November when Prime Minister Abiy Ahmed ordered an offensive against the Tigray People’s Liberation Front (TPLF), the former ruling party in the northern region, after regional forces attacked federal army bases there.

Abiy declared victory less than a month later but low-level fighting continues.

Tuesday’s agreement is subject to approval by the IMF executive board.

Finance Minister Ahmed Shide and State Minister of Finance Eyob Tekalign Tolina did not respond to requests from Reuters for comment.

The Fund also said it welcomed Ethiopia’s request for “debt treatment under the G20 Common Framework.”

Last month, Ethiopia said it planned to restructure its sovereign debt under the framework, designed to help with economic pressures induced by COVID-19, and was examining all options.

The IMF said that economic growth is projected to be 2% in 2020/21, largely the effects of the pandemic, but it is expected to rebound to 8.7% in 2021/22 in line with a global recovery.

Related:

S&P joins Fitch in downgrade of Ethiopia on potential debt restructuring


S&P said it estimated Ethiopia’s public debt repayment needs at about $5.5 billion over 2021-2024, including a $1 billion Eurobond due in 2024. The ratings agency added that the economic effects of the COVID-19 pandemic have slowed Ethiopia’s economic activity in the services and industry sectors. (Photo: Addis ababa skyline/Wiki Media)

Reuters

Updated: February 13th, 2021

S&P Global Ratings on Friday downgraded Ethiopia’s long-term foreign and local currency sovereign credit ratings to ‘B-’ from ‘B’ on potential debt restructuring, announcing the move days after Fitch Ratings downgraded the country.

“Exacerbated by the effects of the COVID-19 pandemic, Ethiopia’s structurally weak external balance sheet has deteriorated further, in our view”, S&P Global Ratings said.

On Tuesday, Ethiopia’s sovereign dollar bonds dropped nearly 2 cents as Fitch chopped Ethiopia’s credit score by two notches after Addis Ababa signaled it could be the first with an international government bond to use a new G20 ‘Common Framework’ plan.

The scheme, which is open to over 70 of the world’s poorest countries, encourages their governments to defer or negotiate down their external debt as part of a wider debt relief program.

S&P said it estimated Ethiopia’s public debt repayment needs at about $5.5 billion over 2021-2024, including a $1 billion Eurobond due in 2024.

The ratings agency added that the economic effects of the COVID-19 pandemic have slowed Ethiopia’s economic activity in the services and industry sectors, including retail trade, hospitality, transportation, and construction.

S&P described the Tigray conflict in November 2020 that followed increased tensions between the federal and local authorities as “the most significant (conflict) since Prime Minister Abby Ahmed took office in 2018.”

“Another outbreak of armed conflict could spur wider ethnic tensions, weakening Ethiopia’s political and institutional framework and threatening the government’s transformative reform agenda”, it added.

Ethiopia Dollar Bonds Drop After Fitch Downgrade

Reuters

Updated: February 11th, 2021

LONDON – Ethiopia’s sovereign dollar bonds dropped nearly 2 cents after Fitch downgraded the country toCCC, citing the government’s plan to make use of the new G20common framework to overhaul its debt burden.

The country’s outstanding 2024 bond dropped to as low as 92.06 cents in the dollar, according to Tradeweb data, trading close to record lows hit in late January when Ethiopia surprised markets with its announcement to seek debt relief.

“(This is) the first negative spillover from last week’s decision to go for the G20 Common Framework, a process that no euro bond issuer has been though yet, and one that could take some time, especially as private sector creditors have to be included,” said Simon Quijano-Evans, chief economist at Gemcorp Capital.

Fitch said earlier that the downgrade reflects the government’s announcement that it is looking to make use of theG20 framework, “which although still an untested mechanism,explicitly raises the risk of a default event.”

Related:

Update: Ethiopia Will Approach Private Creditors Only as a Last Resort

Fitch Downgrades Ethiopia Due to Debt Restructuring


The downgrade reflects the government’s announcement that it is looking to make use of the G20 “Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI)” (G20 CF), which although still an untested mechanism, explicitly raises the risk of a default event. (Fitch Ratings)

Fitch Ratings

Fitch Downgrades Ethiopia to ‘CCC’

Fitch Ratings – Hong Kong – 09 Feb 2021: Fitch Ratings has downgraded Ethiopia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC’ from ‘B’.

Fitch typically does not assign Outlooks or apply modifiers to sovereigns with a rating of ‘CCC’ or below.

KEY RATING DRIVERS

The downgrade reflects the government’s announcement that it is looking to make use of the G20 “Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI)” (G20 CF), which although still an untested mechanism, explicitly raises the risk of a default event.

The G20 CF, agreed in November 2020 by the G20 and Paris Club, goes beyond the DSSI that took effect in May 2020, in that it requires countries to seek debt treatment by private creditors and that this should be comparable with the debt treatment provided by official bilateral creditors. This could mean that Ethiopia’s one outstanding Eurobond and other commercial debt would need to be restructured, potentially representing a distressed debt exchange under Fitch’s sovereign rating criteria. There remains uncertainty over how the G20 CF will be implemented in practice, including the requirement for private sector participation and comparable treatment. Fitch’s sovereign ratings apply to borrowing from the private sector, so official bilateral debt relief does not constitute a default, although it can point to increasing credit stress.

Within the context of Paris Club agreements, comparable treatment requirements are not always enforced and the scope of debt included can vary. The Paris Club states that the requirement for comparable treatment by other creditors can be waived in some circumstances, including when the debt represents only a small proportion of the country’s debt burden.

The focus of Ethiopia’s engagement with the G20 CF will be on official bilateral debt, as reprofiling of this will have the biggest impact on overall debt sustainability. Nonetheless, the terms of the framework clearly create risk that private sector creditors will also be negatively affected. The G20 statement on the G20 CF indicates that debt treatments will not typically involve debt write-offs or cancellation unless deemed necessary. The focus will instead be on some combination of lowering coupons and lengthening grace periods and maturities. The extent of debt treatment required will be based upon the outcome of the IMF’s Debt Sustainability Analysis for Ethiopia, which is currently being updated. However, any material change of terms for private creditors, including the lowering of coupons or the extension of maturities, would be consistent with the definition of default in Fitch’s criteria.

The bulk of Ethiopia’s public external debt is official multilateral and bilateral debt. Government and government-guaranteed external debt was USD25 billion in fiscal year 2020 (FY20, which ended in June 2020). Of this, USD3.3 billion was owed to private creditors. This includes Ethiopia’s outstanding USD1 billion Eurobond (1% of GDP) due in December 2024, with minimal annual debt service of USD66 million until the maturity; and USD2.3 billion government-guaranteed debt owed to foreign commercial banks and suppliers. Other SOE debt to private creditors which relates to Ethio Telecom and Ethiopian Airlines is a further USD3.3 billion. While this is not guaranteed by the government, it represents a potential contingent liability.

Ethiopia’s external finances are a rating weakness and this is the main factor behind the intention of using the G20 CF. Persistent current account deficits (CAD), low FX reserves and rising external debt repayments present risks to external debt sustainability. Ethiopia’s external financing requirements, at more than USD5 billion on average in FY21-FY22 including federal government and SOE amortisation, are high relative to FX reserves, which we forecast to remain at around USD3 billion. Reserves cover only around two months of current external payments.

The CAD narrowed to 4.1% of GDP in FY20 as imports declined, maintaining the trend since FY15 when the CAD was 12.5% of GDP. We forecast the CAD to hover around 4% of GDP, although this does not incorporate potential import costs associated with vaccines to combat the coronavirus pandemic. Smaller CADs have not eased pressure on FX reserves because net FDI has been lacklustre (averaging 2.7% of GDP in FY19-FY20) and net external borrowing has moderated with negative net borrowing by SOEs. The central bank has allowed sharper exchange rate depreciation, but the currency nonetheless remains overvalued, with a weaker rate in the parallel market. Proposed sales of mobile licenses and a stake in Ethio Telecom, the state-owned telecoms company, are an upside risk to FDI inflows and reserves in FY21-FY22.

The IMF assessed Ethiopia at high risk of external debt distress in its latest assessment in 2020, with Ethiopia breaching thresholds on external debt service/exports and the present value of external debt/exports. An improvement from high to moderate risk is a central aim of the three-year arrangement with the IMF agreed in late 2019 under the Extended Credit Facility and the Extended Fund Facility. Given the difficulty of substantially boosting exports in the near term, the main route to achieve this is via reducing debt service costs. Within the IMF programme, the authorities planned by the first review to undertake additional reprofiling of bilateral loans but this has not yet happened. The pandemic has placed further emphasis on debt reprofiling.

Ethiopia and the IMF reached staff-level agreement on the first review of the programme in August 2020, but this awaits board approval. The Fund’s press release recognised that performance had mostly been good, but also emphasised the need for financial support from Ethiopia’s international partners including through debt reprofiling.

Ethiopia’s ‘CCC’ IDRs also reflect the following key rating drivers:

Strong economic growth potential and an improving policy framework support the rating, while double-digit inflation, low development and governance indicators and elevated political risks weigh on the rating.

The coronavirus pandemic continues to present significant risks to Ethiopia, but the negative economic impacts since the onset have been somewhat contained so far. Given that the fiscal year ends in June, we do expect more of a hit to growth in FY21 than FY20, but forecast a return to growth rates in the 6%-7% range over the medium term. The government has maintained considerable budgetary discipline, with moderate increases in the general government budget deficit, to 2.8% of GDP, and government debt/GDP (31.5%), while total SOE debt/GDP (25.6%) has fallen. However, the pandemic presents risks of upward pressure on spending. Government financing has continued its transition towards market-based T-bill auctions and away from the long-standing system of direct advances from the National Bank of Ethiopia (NBE, the central bank). This is a core part of the IMF programme, which seeks to promote monetary policy reforms to help gradually tackle inflation that has remained extremely high at close to 20%.

The military conflict in the Tigray region from November 2020 has underlined ongoing political risks in Ethiopia as well as for Ethiopia’s international relations. Considerable domestic political uncertainty, related to the delayed 2020 parliamentary election (now planned for June) and ongoing ethnic and regional tensions within the country, remains a risk to Ethiopia’s credit metrics, in Fitch’s view. Greater political unrest could, for example, act as a drag on FDI and tax collection and exert further upward pressure on inflation. It could also lead to worsening relations with some bilateral partners and hold up donor flows, as illustrated by the suspension of some flows from the EU in December.

ESG – Governance: Ethiopia has an ESG Relevance Score (RS) of 5 for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption, as is the case for all sovereigns. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in our proprietary Sovereign Rating Model. Ethiopia has a low WBGI ranking in the 25th percentile, reflecting in particular political instability, as well as low scores for voice and accountability and regulatory quality.

RATING SENSITIVITIES

The main factors that could, individually or collectively, lead to negative rating action/downgrade:

- Structural Features: Stronger evidence that Ethiopia’s engagement in the G20 CF will lead to comparable treatment for private sector creditors consistent with a default event under Fitch’s criteria.

- External Finances: Increased external vulnerability that heightens the risk of default irrespective of the G20 CF, such as the emergence of external financing gaps and downward pressure on already low foreign-exchange reserves.

The main factors that could, individually or collectively, lead to positive rating action/upgrade are:

- Structural Features: Clarity that the G20 CF will not lead to a default event.

- External Finances: Stronger external finances with acceleration in exports, for example, leading to smaller CADs and higher foreign-currency reserves.

SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)

In accordance with the rating criteria for ratings in the ‘CCC’ range and below, Fitch’s sovereign rating committee has not used the SRM and QO to explain the ratings, which are instead guided by the rating definitions.

Fitch’s SRM is the agency’s proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch’s QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from ‘AAA’ to ‘D’. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579].

KEY ASSUMPTIONS

We assume that Ethiopia pursues involvement in the G20 CF.

We expect global economic trends and commodity prices to develop as outlined in Fitch’s Global Economic Outlook.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG CONSIDERATIONS

Ethiopia has an ESG Relevance Score of 5 for Political Stability and Rights as World Bank Governance Indicators have the highest weight in Fitch’s SRM and are therefore highly relevant to the rating and a key rating driver with a high weight.

Ethiopia has an ESG Relevance Score of 5 for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as World Bank Governance Indicators have the highest weight in Fitch’s SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight.

Ethiopia has an ESG Relevance Score of 4 for Human Rights and Political Freedoms as the Voice and Accountability pillar of the World Bank Governance Indicators is relevant to the rating and a rating driver.

Ethiopia has an ESG Relevance Score of 4 for Creditor Rights as willingness to service and repay debt is relevant to the rating and is a rating driver, as for all sovereigns.

Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.

Africa Report: Ethiopia Debt Restructuring Plan Faces Hurdles of Transparency


(Reuters photo)

The Africa Report

Ethiopia’s plan to seek debt restructuring under a G20 common framework agreed in November triggered a sell-off in African debt at the end of January on fears of a contagion effect.

The framework enables debtor countries to seek an IMF programme to strengthen their economies and renegotiate their debts with public and private creditors. But such a debt restructuring for Ethiopia would face barriers due a lack of transparency, analysts say.

Any attempt to reconcile balance of payments and published public external debt figures with underlying debt-creating flows shows information gaps and supports “a narrative of opaque lending”, argues Irmgard Erasmus, senior financial economist at NKC African Economics in Cape Town.

Along with Djibouti and Zambia, Ethiopia’s dealings with China “raise the probability of higher-than-estimated debt contracted by extra-budgetary units (EBUs) as well as potentially large contingent liabilities,” she writes in a research note.

China does not publish official or non-official bilateral debt agreements with central governments or state-owned enterprises, she notes.

The channel through which private-sector participation in the framework can be forced is not clear, Erasmus says.

“The agreement of the principles of the G20 Common Framework is positive but negotiations in actual restructurings are likely to be challenging,” says Mark Bohlund, senior credit research analyst at REDD Intelligence in London. Lack of clarity on what is owed to China is one obstacle. While he hasn’t seen any firm evidence of Chinese loans to Ethiopia being understated, there is “less transparency” on Chinese lending, he says.

The fact that India and Turkey, which are non-Paris club G20 lenders, are the largest bilateral creditors after China, may complicate an Ethiopian restructuring, Bohlund says.

A further stumbling block is reluctance from debtor nations to participate in fear of adverse credit rating actions. African countries intending to tap international debt markets this year, such as Tunisia, Ghana and Kenya, may be reluctant to join the initiative, Erasmus says.

Unrealistic growth outlook

For Africa, recent sharp declines in external borrowing costs for many countries amid global optimism on emerging markets provides a “silver lining” to the cloud of debt woes, according to Jacques Nel, head of Africa macro at NKC. “Markets are now open to lending to many sub-Saharan African sovereigns, which could provide the necessary fiscal breathing room in 2021.”

But official Ethiopian projections for annual economic growth of 8.4% are dismissed by Erasmus. NKC predicts growth of 2.2% given the “dire fiscal position and balance of payments risks.”

“The near-term outlook is clouded by political tensions ahead of the June election, reputational risks related to armed conflict in Tigray, an upsurge in desert locust infestation and forex shortages,” Erasmus writes.

That means the long-awaited liberalisation of Ethiopia’s high-potential sectors such as telecommunications and banking is now urgent. This would be the “crucial first step in addressing structural vulnerability and lowering government debt dependence,” Erasmus argues.

Read more »

UPDATE: Ethiopia May Engage Private Creditors After Debt Review


Ethiopia is looking to offset the impact of the pandemic on its economy. (Getty Images)

Bloomberg

Updated: February 2nd, 2021

Ethiopia may approach private creditors for debt talks after it reviews liabilities with official lenders amid security risks that are adding to investors’ worries.

The nation’s Eurobonds plunged the most on record last week after State Minister of Finance Eyob Tekalign said the government will seek to restructure its external debt under a Group of 20 debt-suspension program. With no details on how the decision would affect holders of Ethiopia’s $1 billion of 2024 Eurobonds, many investors responded by selling the securities.

Only after talks involving official creditors, which the International Monetary Fund is assisting with, will the government be able to inform other creditors on the “need for broader debt treatment discussions,” the finance ministry said in a press statement on Monday.

Yields on Ethiopia’s $1 billion of 2024 Eurobonds climbed 26 basis points to 8.85% by 1:50 p.m. in London after jumping 207 points on Friday to the highest since May. The premium investors demand to hold the nation’s dollar bonds rather than U.S. Treasuries widened 31 basis points to 807, compared with the 538 average for African sovereign issuers, according to JPMorgan Chase & Co. indexes.

“In theory, a common framework should speed up the debt restructuring process, but it remains to be tested,” Morgan Stanley & Co. analysts Jaiparan Khurana and Simon Waever said in a note. “Questions around enforceability of the MoU terms to the private sector still persist, especially considering that the private sector is not a signatory.”

Ethiopia is the second African country after Chad to announce plans to review debt under the G-20 common framework, which aims to include China and private lenders into a global debt-relief push.

Ethiopia, like other African nations, is looking to offset the impact of the coronavirus pandemic on its economy. Ethiopia’s position is, however, exacerbated by fighting in the northern Tigray region and a border dispute with Sudan that’s threating to further destabilize the region.

“Possible implementation of the debt treatment under the Common Framework will address the debt vulnerabilities of the country, while preserving long-term access to international financial markets,” the finance ministry said in the statement. That will help in “unlocking more growth potential,” it said.

As with earlier bilateral debt relief, including via the Paris Club, Eurobond holders can choose not to participate in the program, according to the Morgan Stanley analysts. “The key issue would be how insistent bilateral creditors would be on the private sector participating,” they said.

Related:

Ethiopia to Seek Debt Relief Under G20 Debt Framework – Ministry


Under the new G20 framework, debtor countries are expected to seek an IMF programme to steer their economies back to a firmer ground and negotiate a debt reduction from both public and private creditors.(Getty Images)

Reuters

Updated: January 30th, 2021

Exclusive: Ethiopia to seek debt relief under G20 debt framework – ministry

Ethiopia plans to seek a restructuring of its sovereign debt under a new G20 common framework and is looking at all the available options, the country’s finance ministry told Reuters on Friday.

G20 countries agreed in November for the first time to a common approach for restructuring government debt to help ease the financial strain of some developing countries pushed towards the risk of default by costs of the coronavirus crisis.

Chad became on Wednesday the first country to officially request a debt restructuring under the new framework and a French finance ministry told Reuters on Thursday that Zambia and Ethiopia were most likely to follow suit.

Asked if Ethiopia was looking to seek a debt restructuring under the G20 framework, Finance Ministry spokesman Semereta Sewasew said: “Yes, Ethiopia will look at all available debt treatment options under the G20 communique issued in November.”

Ethiopia’s government bond due for repayment in 2024 which it issued back in late 2014 saw its biggest ever daily fall. It plunged 8.4 cents on the dollar from roughly par to just under 92 cents.

Ethiopia is already benefiting from a suspension of interest payments to its official sector creditors through the end of June under an initiative between the G20 and the Paris Club of creditor nations.

Under the new G20 framework, debtor countries are expected to seek an IMF programme to steer their economies back to a firmer ground and negotiate a debt reduction from both public and private creditors.

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Business: Seattle Coffee Importer Expands QMS From Mexico to Ethiopia

Mengistu Itefa (seated) acted as an intern on behalf of Ethiopia’s Asikana producer cooperative to implement the FincaLab system. Here he’s showing photos to members of the PROCAA group in Nayarit, Mexico. (Photo: courtesy of San Cristobal Coffee Importers)

Daily Coffee News

Seattle-area green coffee company San Cristobal Coffee Importers has expanded its producer-centered quality management and traceability system, called FincaLab, from Mexico to Ethiopia.

San Cristobal, which was focused mainly on trading partners and relationships in parts of Nayarit, Mexico, since its founding in 1996, has been honing the system there for more than a decade, attempting to engage coffee producers in quality management processes from seed to cup.

The proprietary quality management system (QMS) is now reflected for the first time outside Nayarit through a transcontinental internship involving members of the Asikana cooperative in Oromia, Ethiopia. The internship and implementation has resulted in the Ethiopian producer group’s first coffee exports.

FincaLab was developed by San Cristobal and a trading and warehousing partner in Nayarit called Costa Oro. The system involves extended ICO marks on each bag of green coffee along with corresponding barcodes that trace coffees to the farm level and detail processing methods, coffee variety and other distinct features.


The first exports of traceable Asikana coffee reached the United States late last year. (Photo: San Cristobal Coffee)

The system is designed for traceability throughout the supply stream, while its also designed to ensure that farmers are receiving adequate compensation though continued access to markets via the centralized platform.

“Our model organization, Grupo Terruño Nayarita (GTNAY), has some 600 producer members spread throughout six coffee-producing communities and eight local societies across the state of Nayarit,” San Cristobal President and FincaLab developer James Kosalos recently told DCN. “Without a quality management system (QMS) and a centralized corporate structure in place, any one producer from one of these locations has no guarantee they will have a buyer for a given harvest, and they have no insurance if their coffee quality is not good.”

Though the system has proven beneficial to buyers and sellers alike, expanding it to producer partners in Ethiopia required more than mere barcodes. It took lengthy in-person commitments, including multiple flights from Ethiopia to Mexico and vice versa over the course of two years.

Said Kosalos, “The intern, Mengistu Itefa, observed all the details of the FincaLab QMS [in Nayarit], from the picking of fruit to the milling of the resulting coffee and the loading of containers with coffee in barcode-labeled bags destined for the U.S., Australia, and Great Britain — each with an internet traceable serial number.”


Mengistu Itefa implementing the FincaLab system in Ethiopia. ((Photo: San Cristobal Coffee)

Though palate calibration and logistical issues and a host of other factors made the prospect of translating the QMS daunting, the first container of FincaLab-generated, traceable coffees from Ethiopia successfully arrived late last year.

San Cristobal said that despite some recent challenges due to civil unrest and supply disruptions in parts of Ethiopia, it plans to continue implementing the FincaLab system to ensure a more equitable supply chain.

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World Bank Calls for Unbiased Infrastructure Policy in Ethiopia

The country manager elaborated further on the World Bank’s pledge to invest $200 million into the market via the new Digital Ethiopia Foundations project, saying the strategy was aimed at creating “the legal and regulatory building blocks for the digital ecosystem, in areas like e-commerce and Digital ID.” (DT)

Developing Telecoms

The World Bank has confirmed plans to invest $200 million into Ethiopia’s digital economy as the country liberalises its telecoms market, but has cautioned that policies aimed at encouraging new entrants to lease infrastructure from Ethio Telecom could prove counterproductive.

Ousmane Dione, World Bank country director for Eritrea, Ethiopia, South Sudan and Sudan, warned that deployments could stall if new operators were pushed to lease infrastructure from Ethio Telecom rather than independent tower firms, arguing that it would be best if market entrants were able to “make rational decisions whether to build their own infrastructure.”

“To benefit fully from competition does not mean offering preferential treatment to Ethio Telecom but rather creating a level playing field on which it can compete fairly with its new rivals,” argued Dione. He noted that rural areas could be particularly badly affected.

Ethio Telecom has long held a monopoly in the market, with the bidding process for two new universal licences currently underway as Ethiopia moves towards opening up its telecoms sector. Operator groups including Etisalat, MTN, Orange, STC and a consortium headed by Vodafone are competing for the licences.

However, Dione noted that regulations governing the construction of private infrastructure and restricting foreign ownership of finance providers would be damaging both to new entrants seeking to set up financial offerings as well as Ethio Telecom.

“Ultimately, policies that seek to protect Ethio Telecom’s infrastructure by allowing it to charge high prices for interconnection will end up harming the company,” added Dione.

The country manager elaborated further on the World Bank’s pledge to invest $200 million into the market via the new Digital Ethiopia Foundations project, saying the strategy was aimed at creating “the legal and regulatory building blocks for the digital ecosystem, in areas like e-commerce and Digital ID.”

Related:

UPDATE: Ethiopia Extends Deadline for New Telecom License Bids by a Month


Ethiopia’s telecoms industry is considered the big prize in a push to liberalize the economy because of the huge size of the market, which serves more than 100 million people. (Photo: Ethio Telecom)

Reuters

Updated: February 2nd, 2021

Ethiopia has extended the deadline for telecom firms to bid for new operating licenses by a month to April 5, the sector regulator said on Monday, citing requests from interested companies.

The Horn of Africa nation’s telecoms industry is considered the big prize in a push to liberalize the economy because of the huge size of the market, which serves more than 100 million people.

Prime Minister Abiy Ahmed is pressing ahead with the auction of the new licenses and the sale of a 45% stake in state monopoly Ethio Telecoms, in spite of a military conflict in the northern Tigray region.

Firms will be required to submit their technical and financial bids by April 5, compared with a previous deadline of March 5, the Ethiopian Communications Authority said in a statement.

Winners will be given full operating licenses, but they will not be allowed to offer mobile phone-based financial services, government officials said last year.

They will also be required to set up their own network infrastructure, such as cellphone towers, they said.

Kenya’s top operator Safaricom, which has expressed an interest in a consortium with Vodafone and Vodacom, estimated in 2019 it would have to pay about $1 billion for a new license.

Other firms that have expressed an interest include South Africa’s MTN, Etisalat from the United Arab Emirates and France’s Orange SA.

Related:

Ethiopia Telecom Reports 12% Rise in H1 Revenue


The government said last year it will retain a 55% stake in Ethio Telecom, with 40% going to international companies and the remainder to local investors. (Reuters photo)

Reuters

Updated: January 22nd, 2021

State-run Ethio Telecom, expected to be partly sold off as Ethiopia liberalises its economy, reported a 12% rise in first-half revenue to end-December to 25.6 billion birr ($650 million), it said on Thursday.

The government said last year it will retain a 55% stake in Ethio Telecom, with 40% going to international companies and the remainder to local investors.

Ethio Telecom said mobile voice services contributed 49% of the revenue and data services some 26%.

The company plans to launch mobile money services soon, it said, but did not give a timeframe.

In June, the telecoms regulator said it had received 12 bids for two telecom licences the government plans to award to multinational companies.

The regulator has not given a deadline for when it will award the licences.

Ethiopia’s telecoms industry is considered the big prize in a push to liberalise the economy as a protected market which serves more than 110 million people.

($1 = 39.3650 birr)

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BUSINESS UPDATE: S&P Joins Fitch in Downgrade of Ethiopia on Debt Issue

S&P said it estimated Ethiopia’s public debt repayment needs at about $5.5 billion over 2021-2024, including a $1 billion Eurobond due in 2024. The ratings agency added that the economic effects of the COVID-19 pandemic have slowed Ethiopia’s economic activity in the services and industry sectors. (Photo: Addis ababa skyline/Wiki Media)

Reuters

Updated: February 13th, 2021

S&P joins Fitch in downgrade of Ethiopia on potential debt restructuring

S&P Global Ratings on Friday downgraded Ethiopia’s long-term foreign and local currency sovereign credit ratings to ‘B-’ from ‘B’ on potential debt restructuring, announcing the move days after Fitch Ratings downgraded the country.

“Exacerbated by the effects of the COVID-19 pandemic, Ethiopia’s structurally weak external balance sheet has deteriorated further, in our view”, S&P Global Ratings said.

On Tuesday, Ethiopia’s sovereign dollar bonds dropped nearly 2 cents as Fitch chopped Ethiopia’s credit score by two notches after Addis Ababa signaled it could be the first with an international government bond to use a new G20 ‘Common Framework’ plan.

The scheme, which is open to over 70 of the world’s poorest countries, encourages their governments to defer or negotiate down their external debt as part of a wider debt relief program.

S&P said it estimated Ethiopia’s public debt repayment needs at about $5.5 billion over 2021-2024, including a $1 billion Eurobond due in 2024.

The ratings agency added that the economic effects of the COVID-19 pandemic have slowed Ethiopia’s economic activity in the services and industry sectors, including retail trade, hospitality, transportation, and construction.

S&P described the Tigray conflict in November 2020 that followed increased tensions between the federal and local authorities as “the most significant (conflict) since Prime Minister Abby Ahmed took office in 2018.”

“Another outbreak of armed conflict could spur wider ethnic tensions, weakening Ethiopia’s political and institutional framework and threatening the government’s transformative reform agenda”, it added.

Ethiopia Dollar Bonds Drop After Fitch Downgrade

Reuters

Updated: February 11th, 2021

LONDON – Ethiopia’s sovereign dollar bonds dropped nearly 2 cents after Fitch downgraded the country toCCC, citing the government’s plan to make use of the new G20common framework to overhaul its debt burden.

The country’s outstanding 2024 bond dropped to as low as 92.06 cents in the dollar, according to Tradeweb data, trading close to record lows hit in late January when Ethiopia surprised markets with its announcement to seek debt relief.

“(This is) the first negative spillover from last week’s decision to go for the G20 Common Framework, a process that no euro bond issuer has been though yet, and one that could take some time, especially as private sector creditors have to be included,” said Simon Quijano-Evans, chief economist at Gemcorp Capital.

Fitch said earlier that the downgrade reflects the government’s announcement that it is looking to make use of theG20 framework, “which although still an untested mechanism,explicitly raises the risk of a default event.”

Related:

Update: Ethiopia Will Approach Private Creditors Only as a Last Resort

Fitch Downgrades Ethiopia Due to Debt Restructuring


The downgrade reflects the government’s announcement that it is looking to make use of the G20 “Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI)” (G20 CF), which although still an untested mechanism, explicitly raises the risk of a default event. (Fitch Ratings)

Fitch Ratings

Fitch Downgrades Ethiopia to ‘CCC’

Fitch Ratings – Hong Kong – 09 Feb 2021: Fitch Ratings has downgraded Ethiopia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC’ from ‘B’.

Fitch typically does not assign Outlooks or apply modifiers to sovereigns with a rating of ‘CCC’ or below.

KEY RATING DRIVERS

The downgrade reflects the government’s announcement that it is looking to make use of the G20 “Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI)” (G20 CF), which although still an untested mechanism, explicitly raises the risk of a default event.

The G20 CF, agreed in November 2020 by the G20 and Paris Club, goes beyond the DSSI that took effect in May 2020, in that it requires countries to seek debt treatment by private creditors and that this should be comparable with the debt treatment provided by official bilateral creditors. This could mean that Ethiopia’s one outstanding Eurobond and other commercial debt would need to be restructured, potentially representing a distressed debt exchange under Fitch’s sovereign rating criteria. There remains uncertainty over how the G20 CF will be implemented in practice, including the requirement for private sector participation and comparable treatment. Fitch’s sovereign ratings apply to borrowing from the private sector, so official bilateral debt relief does not constitute a default, although it can point to increasing credit stress.

Within the context of Paris Club agreements, comparable treatment requirements are not always enforced and the scope of debt included can vary. The Paris Club states that the requirement for comparable treatment by other creditors can be waived in some circumstances, including when the debt represents only a small proportion of the country’s debt burden.

The focus of Ethiopia’s engagement with the G20 CF will be on official bilateral debt, as reprofiling of this will have the biggest impact on overall debt sustainability. Nonetheless, the terms of the framework clearly create risk that private sector creditors will also be negatively affected. The G20 statement on the G20 CF indicates that debt treatments will not typically involve debt write-offs or cancellation unless deemed necessary. The focus will instead be on some combination of lowering coupons and lengthening grace periods and maturities. The extent of debt treatment required will be based upon the outcome of the IMF’s Debt Sustainability Analysis for Ethiopia, which is currently being updated. However, any material change of terms for private creditors, including the lowering of coupons or the extension of maturities, would be consistent with the definition of default in Fitch’s criteria.

The bulk of Ethiopia’s public external debt is official multilateral and bilateral debt. Government and government-guaranteed external debt was USD25 billion in fiscal year 2020 (FY20, which ended in June 2020). Of this, USD3.3 billion was owed to private creditors. This includes Ethiopia’s outstanding USD1 billion Eurobond (1% of GDP) due in December 2024, with minimal annual debt service of USD66 million until the maturity; and USD2.3 billion government-guaranteed debt owed to foreign commercial banks and suppliers. Other SOE debt to private creditors which relates to Ethio Telecom and Ethiopian Airlines is a further USD3.3 billion. While this is not guaranteed by the government, it represents a potential contingent liability.

Ethiopia’s external finances are a rating weakness and this is the main factor behind the intention of using the G20 CF. Persistent current account deficits (CAD), low FX reserves and rising external debt repayments present risks to external debt sustainability. Ethiopia’s external financing requirements, at more than USD5 billion on average in FY21-FY22 including federal government and SOE amortisation, are high relative to FX reserves, which we forecast to remain at around USD3 billion. Reserves cover only around two months of current external payments.

The CAD narrowed to 4.1% of GDP in FY20 as imports declined, maintaining the trend since FY15 when the CAD was 12.5% of GDP. We forecast the CAD to hover around 4% of GDP, although this does not incorporate potential import costs associated with vaccines to combat the coronavirus pandemic. Smaller CADs have not eased pressure on FX reserves because net FDI has been lacklustre (averaging 2.7% of GDP in FY19-FY20) and net external borrowing has moderated with negative net borrowing by SOEs. The central bank has allowed sharper exchange rate depreciation, but the currency nonetheless remains overvalued, with a weaker rate in the parallel market. Proposed sales of mobile licenses and a stake in Ethio Telecom, the state-owned telecoms company, are an upside risk to FDI inflows and reserves in FY21-FY22.

The IMF assessed Ethiopia at high risk of external debt distress in its latest assessment in 2020, with Ethiopia breaching thresholds on external debt service/exports and the present value of external debt/exports. An improvement from high to moderate risk is a central aim of the three-year arrangement with the IMF agreed in late 2019 under the Extended Credit Facility and the Extended Fund Facility. Given the difficulty of substantially boosting exports in the near term, the main route to achieve this is via reducing debt service costs. Within the IMF programme, the authorities planned by the first review to undertake additional reprofiling of bilateral loans but this has not yet happened. The pandemic has placed further emphasis on debt reprofiling.

Ethiopia and the IMF reached staff-level agreement on the first review of the programme in August 2020, but this awaits board approval. The Fund’s press release recognised that performance had mostly been good, but also emphasised the need for financial support from Ethiopia’s international partners including through debt reprofiling.

Ethiopia’s ‘CCC’ IDRs also reflect the following key rating drivers:

Strong economic growth potential and an improving policy framework support the rating, while double-digit inflation, low development and governance indicators and elevated political risks weigh on the rating.

The coronavirus pandemic continues to present significant risks to Ethiopia, but the negative economic impacts since the onset have been somewhat contained so far. Given that the fiscal year ends in June, we do expect more of a hit to growth in FY21 than FY20, but forecast a return to growth rates in the 6%-7% range over the medium term. The government has maintained considerable budgetary discipline, with moderate increases in the general government budget deficit, to 2.8% of GDP, and government debt/GDP (31.5%), while total SOE debt/GDP (25.6%) has fallen. However, the pandemic presents risks of upward pressure on spending. Government financing has continued its transition towards market-based T-bill auctions and away from the long-standing system of direct advances from the National Bank of Ethiopia (NBE, the central bank). This is a core part of the IMF programme, which seeks to promote monetary policy reforms to help gradually tackle inflation that has remained extremely high at close to 20%.

The military conflict in the Tigray region from November 2020 has underlined ongoing political risks in Ethiopia as well as for Ethiopia’s international relations. Considerable domestic political uncertainty, related to the delayed 2020 parliamentary election (now planned for June) and ongoing ethnic and regional tensions within the country, remains a risk to Ethiopia’s credit metrics, in Fitch’s view. Greater political unrest could, for example, act as a drag on FDI and tax collection and exert further upward pressure on inflation. It could also lead to worsening relations with some bilateral partners and hold up donor flows, as illustrated by the suspension of some flows from the EU in December.

ESG – Governance: Ethiopia has an ESG Relevance Score (RS) of 5 for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption, as is the case for all sovereigns. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in our proprietary Sovereign Rating Model. Ethiopia has a low WBGI ranking in the 25th percentile, reflecting in particular political instability, as well as low scores for voice and accountability and regulatory quality.

RATING SENSITIVITIES

The main factors that could, individually or collectively, lead to negative rating action/downgrade:

- Structural Features: Stronger evidence that Ethiopia’s engagement in the G20 CF will lead to comparable treatment for private sector creditors consistent with a default event under Fitch’s criteria.

- External Finances: Increased external vulnerability that heightens the risk of default irrespective of the G20 CF, such as the emergence of external financing gaps and downward pressure on already low foreign-exchange reserves.

The main factors that could, individually or collectively, lead to positive rating action/upgrade are:

- Structural Features: Clarity that the G20 CF will not lead to a default event.

- External Finances: Stronger external finances with acceleration in exports, for example, leading to smaller CADs and higher foreign-currency reserves.

SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)

In accordance with the rating criteria for ratings in the ‘CCC’ range and below, Fitch’s sovereign rating committee has not used the SRM and QO to explain the ratings, which are instead guided by the rating definitions.

Fitch’s SRM is the agency’s proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch’s QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from ‘AAA’ to ‘D’. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579].

KEY ASSUMPTIONS

We assume that Ethiopia pursues involvement in the G20 CF.

We expect global economic trends and commodity prices to develop as outlined in Fitch’s Global Economic Outlook.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG CONSIDERATIONS

Ethiopia has an ESG Relevance Score of 5 for Political Stability and Rights as World Bank Governance Indicators have the highest weight in Fitch’s SRM and are therefore highly relevant to the rating and a key rating driver with a high weight.

Ethiopia has an ESG Relevance Score of 5 for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as World Bank Governance Indicators have the highest weight in Fitch’s SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight.

Ethiopia has an ESG Relevance Score of 4 for Human Rights and Political Freedoms as the Voice and Accountability pillar of the World Bank Governance Indicators is relevant to the rating and a rating driver.

Ethiopia has an ESG Relevance Score of 4 for Creditor Rights as willingness to service and repay debt is relevant to the rating and is a rating driver, as for all sovereigns.

Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.

Africa Report: Ethiopia Debt Restructuring Plan Faces Hurdles of Transparency


(Reuters photo)

The Africa Report

Ethiopia’s plan to seek debt restructuring under a G20 common framework agreed in November triggered a sell-off in African debt at the end of January on fears of a contagion effect.

The framework enables debtor countries to seek an IMF programme to strengthen their economies and renegotiate their debts with public and private creditors. But such a debt restructuring for Ethiopia would face barriers due a lack of transparency, analysts say.

Any attempt to reconcile balance of payments and published public external debt figures with underlying debt-creating flows shows information gaps and supports “a narrative of opaque lending”, argues Irmgard Erasmus, senior financial economist at NKC African Economics in Cape Town.

Along with Djibouti and Zambia, Ethiopia’s dealings with China “raise the probability of higher-than-estimated debt contracted by extra-budgetary units (EBUs) as well as potentially large contingent liabilities,” she writes in a research note.

China does not publish official or non-official bilateral debt agreements with central governments or state-owned enterprises, she notes.

The channel through which private-sector participation in the framework can be forced is not clear, Erasmus says.

“The agreement of the principles of the G20 Common Framework is positive but negotiations in actual restructurings are likely to be challenging,” says Mark Bohlund, senior credit research analyst at REDD Intelligence in London. Lack of clarity on what is owed to China is one obstacle. While he hasn’t seen any firm evidence of Chinese loans to Ethiopia being understated, there is “less transparency” on Chinese lending, he says.

The fact that India and Turkey, which are non-Paris club G20 lenders, are the largest bilateral creditors after China, may complicate an Ethiopian restructuring, Bohlund says.

A further stumbling block is reluctance from debtor nations to participate in fear of adverse credit rating actions. African countries intending to tap international debt markets this year, such as Tunisia, Ghana and Kenya, may be reluctant to join the initiative, Erasmus says.

Unrealistic growth outlook

For Africa, recent sharp declines in external borrowing costs for many countries amid global optimism on emerging markets provides a “silver lining” to the cloud of debt woes, according to Jacques Nel, head of Africa macro at NKC. “Markets are now open to lending to many sub-Saharan African sovereigns, which could provide the necessary fiscal breathing room in 2021.”

But official Ethiopian projections for annual economic growth of 8.4% are dismissed by Erasmus. NKC predicts growth of 2.2% given the “dire fiscal position and balance of payments risks.”

“The near-term outlook is clouded by political tensions ahead of the June election, reputational risks related to armed conflict in Tigray, an upsurge in desert locust infestation and forex shortages,” Erasmus writes.

That means the long-awaited liberalisation of Ethiopia’s high-potential sectors such as telecommunications and banking is now urgent. This would be the “crucial first step in addressing structural vulnerability and lowering government debt dependence,” Erasmus argues.

Read more »

UPDATE: Ethiopia May Engage Private Creditors After Debt Review


Ethiopia is looking to offset the impact of the pandemic on its economy. (Getty Images)

Bloomberg

Updated: February 2nd, 2021

Ethiopia may approach private creditors for debt talks after it reviews liabilities with official lenders amid security risks that are adding to investors’ worries.

The nation’s Eurobonds plunged the most on record last week after State Minister of Finance Eyob Tekalign said the government will seek to restructure its external debt under a Group of 20 debt-suspension program. With no details on how the decision would affect holders of Ethiopia’s $1 billion of 2024 Eurobonds, many investors responded by selling the securities.

Only after talks involving official creditors, which the International Monetary Fund is assisting with, will the government be able to inform other creditors on the “need for broader debt treatment discussions,” the finance ministry said in a press statement on Monday.

Yields on Ethiopia’s $1 billion of 2024 Eurobonds climbed 26 basis points to 8.85% by 1:50 p.m. in London after jumping 207 points on Friday to the highest since May. The premium investors demand to hold the nation’s dollar bonds rather than U.S. Treasuries widened 31 basis points to 807, compared with the 538 average for African sovereign issuers, according to JPMorgan Chase & Co. indexes.

“In theory, a common framework should speed up the debt restructuring process, but it remains to be tested,” Morgan Stanley & Co. analysts Jaiparan Khurana and Simon Waever said in a note. “Questions around enforceability of the MoU terms to the private sector still persist, especially considering that the private sector is not a signatory.”

Ethiopia is the second African country after Chad to announce plans to review debt under the G-20 common framework, which aims to include China and private lenders into a global debt-relief push.

Ethiopia, like other African nations, is looking to offset the impact of the coronavirus pandemic on its economy. Ethiopia’s position is, however, exacerbated by fighting in the northern Tigray region and a border dispute with Sudan that’s threating to further destabilize the region.

“Possible implementation of the debt treatment under the Common Framework will address the debt vulnerabilities of the country, while preserving long-term access to international financial markets,” the finance ministry said in the statement. That will help in “unlocking more growth potential,” it said.

As with earlier bilateral debt relief, including via the Paris Club, Eurobond holders can choose not to participate in the program, according to the Morgan Stanley analysts. “The key issue would be how insistent bilateral creditors would be on the private sector participating,” they said.

Related:

Ethiopia to Seek Debt Relief Under G20 Debt Framework – Ministry


Under the new G20 framework, debtor countries are expected to seek an IMF programme to steer their economies back to a firmer ground and negotiate a debt reduction from both public and private creditors.(Getty Images)

Reuters

Updated: January 30th, 2021

Exclusive: Ethiopia to seek debt relief under G20 debt framework – ministry

Ethiopia plans to seek a restructuring of its sovereign debt under a new G20 common framework and is looking at all the available options, the country’s finance ministry told Reuters on Friday.

G20 countries agreed in November for the first time to a common approach for restructuring government debt to help ease the financial strain of some developing countries pushed towards the risk of default by costs of the coronavirus crisis.

Chad became on Wednesday the first country to officially request a debt restructuring under the new framework and a French finance ministry told Reuters on Thursday that Zambia and Ethiopia were most likely to follow suit.

Asked if Ethiopia was looking to seek a debt restructuring under the G20 framework, Finance Ministry spokesman Semereta Sewasew said: “Yes, Ethiopia will look at all available debt treatment options under the G20 communique issued in November.”

Ethiopia’s government bond due for repayment in 2024 which it issued back in late 2014 saw its biggest ever daily fall. It plunged 8.4 cents on the dollar from roughly par to just under 92 cents.

Ethiopia is already benefiting from a suspension of interest payments to its official sector creditors through the end of June under an initiative between the G20 and the Paris Club of creditor nations.

Under the new G20 framework, debtor countries are expected to seek an IMF programme to steer their economies back to a firmer ground and negotiate a debt reduction from both public and private creditors.

Join the conversation on Twitter and Facebook.

Ethiopian-Born D.C. Businessman, Yimaj “Steve” Kalifa, Helps Howard University Fight The Pandemic

Ethiopian-American businessman Yimaj “Steve” Kalifa has built a personal wealth estimated at $100 million. As the Jacksonville Free Press notes: "Now at a time when COVID-19 has struck nearly 38,000 residents of [Washington,D.C.] and killed more than 900, Kalifa is paying back to the community that helped him build his fortune." (The Jacksonville Free Press)

Jacksonville Free Press

As an immigrant from Ethiopia, Washington, D.C., businessman Yimaj “Steve” Kalifa is living the American Dream, having built a personal wealth estimated at $100 million. Now at a time when COVID-19 has struck nearly 38,000 residents of the District and killed more than 900, Kalifa is paying back to the community that helped him build his fortune.

At the urging of a friend with connections to Mayor Muriel Bowser’s office, one of Kalifa’s companies, Capital Medical Supply Inc., donated 30,000 pieces of personal protection equipment to a Howard University virus testing center.

The friend was Armstrong Williams, political commentator and chief executive officer of Howard Stirk Holdings.

“It’s really sad what’s going on, so I really wanted to do something for the community that’s given so much to me,” said Kalifa, 53. “So, Armstrong called me and said, ‘Let’s buy these masks.’ He reached out to the city, which reached out to Howard’s Unity Clinic, and that’s how it happened.”

With a $1 million grant awarded in 2020, Howard University launched a testing site in the impoverished neighborhood of Benning Road Northeast, whose residents are disproportionately affected by pre-existing health conditions that make them susceptible to the novel coronavirus.

The site, which offers free testing four days a week to walk-ins, was impacted by a citywide shortage of personal protective equipment.

“The donation was very helpful at a time when the use of masks was critical to helping to curb the spread of the virus, especially in the minority community,” said Hugh E. Mighty, M.D., dean of the Howard University College of Medicine and vice president for clinical affairs. “We are grateful to Mr. Kalifa and Mr. Williams for their generous donations and support of the community.”

The site is now providing COVID-19 vaccinations, and will extend the program as more vaccine doses become available, Mighty said. Citywide, 83,125 doses have been delivered, with 62,219 administered as of the end of January, according to a monthly COVID-19 situational report released by Bowser’s office.

An additional 10,975 doses are expected to be delivered this week.

Although he incurred a personal cost of about $100,000, Kalifa said it was Williams’ connection to the mayor that made the personal protective equipment donation possible.

“I don’t have her cellphone number; he does,” Kalifa said. “So, he definitely gets credit for that.”

Building his empire

A self-described serial entrepreneur, Kalifa entered the business world in 2006, traveling to more than 20 states opening branches of a home health care company owned by three doctors and based in his adopted hometown of Los Angeles.

“On one trip, I went to Allentown, Pennsylvania, when the property owner offered to sell me the whole building for $30,000,” Kalifa said. “Coming from LA, that was a great price. That was the first property I purchased. But, from that point, in every state that I purchased a property, I leased it back to the three doctors. It was a lot of work starting out on my own, but that was the start of Capital View General Construction Inc.”

CVGC (doing business as Mitchell Heating and Cooling) is now a multimillion-dollar company specializing in commercial construction, road construction, residential construction and renovation projects in Denver and Colorado Springs, Colorado, and Washington, D.C.

CVGC and Mechanical Solutions Inc., a Denver-based heating, ventilation and air conditioning company, make up the bulk of Kalifa’s business portfolio. He also operates Capitol Medical Supply Inc., a durable medical equipment company in the District, and Source Cuisine, which, in 2019, outbid the former owner of Taylor Gourmet in a bankruptcy auction to reopen four locations of the popular D.C. sandwich shop.

Medical staff at Howard University give a Covid-19 vaccination dose. (Tasos Katopodis/Getty Images)
Opposites attract

Williams, 59, a black conservative commentator and owner of several television stations through his company, is known for a brand of rhetoric that often runs counter to voices on the American left. He met Kalifa about 10 years ago at the Congressional Black Caucus dinner. He acknowledges that he and Kalifa agree on little besides a mutual interest in building their respective business holdings.

“We have opposing views, but we have a civil discourse,” said Williams. “We agree on business, and we learn from each other. But, if everybody agreed with everybody, somebody’s not necessary.

“My first impression on meeting Steve was that he is very free, he’s truly free. We can agree on legal, moral and ethical things; I respect that. He’s built the $100 million health care and real estate portfolio around the world that he always wanted to. Steve’s a great guy; he’s my brother.”

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A Tour Through Little Ethiopia in LA

Fekere Gebre-Mariam, owner of Rosalind’s Restaurant in LA's Little Ethiopia, and his youngest daughter, Meklit, simply call this neighborhood home. (LA Eater)

LA Eater

Look closer at the restaurants on Fairfax Avenue with its founding family

The heavily trafficked stretch of Ethiopian-owned businesses along Fairfax Avenue goes by a few different names. It was initially known as Little Addis — a nod to Ethiopia’s capital city of Addis Ababa — when entrepreneurial Ethiopians began laying down roots between Olympic Boulevard and Whitworth Drive in the late ’80s and early ’90s. As the number of restaurants, grocers, clothiers, and salons grew along the corridor, the street was officially anointed Little Ethiopia by the Los Angeles City Council in 2002. But 68-year-old Fekere Gebre-Mariam and his youngest daughter, Meklit, simply call this neighborhood home.

Fairfax Avenue was in a state of transition when Fekere opened the first Ethiopian restaurant there in 1989. The area had previously been known for its thriving Orthodox Jewish community and an accompanying collection of largely Jewish businesses. But over time, the commercial cluster began to wane as owners retired and younger generations grew disinterested in continuing their families’ traditions. The block’s fast-changing demographics and dynamics provided the all-important real estate to make Fekere’s dream of establishing a nucleus for LA’s Ethiopian community a reality. In the years following the opening of Rosalind’s Restaurant, Fekere wooed more Ethiopian businesses to settle on the street and played an instrumental role in nurturing what would ultimately grow into Little Ethiopia.

The area was by all accounts burgeoning by the time Meklit was born in 1993. She grew up among the storefronts on Fairfax and remembers the streets brimming every September in celebration of the Ethiopian new year and running into friends and family every Sunday following church services. And she’ll never forget when she — an 11-year-old self-proclaimed tomboy — was crowned Miss Little Ethiopia in 2004. She donned a fabulous flowy traditional Ethiopian dress and rode through the heart of Little Ethiopia in a top-down convertible waving her hands and grinning from ear to ear in an official parade.

“This is our family’s legacy, my dad’s legacy,” says Meklit. “There’s a little bit of LA that will always have a part of him and our family.”

Nobody knows the history of Little Ethiopia better than Fekere, and nobody understands its vibrant soul like Meklit, so Eater LA tapped this father-daughter duo to show us around the block — sharing some about its founding and a bit about where it’s going — all while touring their go-to restaurants for tongue-tinglingly, throat-clenchingly spicy food. Let’s get right to it.

Rosalind’s Restaurant

The way Fekere remembers it, Little Ethiopia was inspired by Koreatown. After finishing his undergraduate degree at USC, he lived in an apartment on Kingsley between Wilshire and Eighth and observed firsthand as the Korean community flourished north of Olympic Boulevard. At first, the newly opened restaurants and markets only filled a few strip malls, but soon businesses ballooned to occupy entire city blocks and ultimately three square miles of the city. “We [saw] how Koreatown was growing by the year and then we say, ‘Wow, that is interesting. Why don’t we have our own area? Why don’t we have our own restaurants?’” he says. “So that thing was going through my mind for a while.” This audacious idea stayed with Fekere as he pursued a career in real estate following college.

Fekere purchased the original Rosalind’s West African Cuisine from its owners in 1988 when a client’s deal fell through on the La Cienega space. But when the building’s owner took it over after a year of business, Rosalind’s moved to its current digs on Fairfax Avenue. The restaurant’s original menu carried over with the relocation and included specialties from Ghana, Nigeria, and Liberia, in addition to Ethiopian standbys. The restaurant eventually streamlined its offerings as demand for Ethiopian cuisine grew along with the local Ethiopian population.

Read more »

Related:

Review: How the Pandemic Has Changed Ethiopian Dining in DC Area, For Now

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Review: How the Pandemic Has Changed Ethiopian Dining in DC Area, For Now

From left, Admassu Mekonnen, Wubeshet Mehari, Milka Tesfaye and Deriba Reba share lunch at Nazret Ethiopian Restaurant in Falls Church, Virginia. (The Washington Post)

The Washington Post

Ethiopian dining is as much about community as food. The pandemic has changed that, for now.

A businessman from Addis Ababa has dined on occasion during the pandemic at Nazret Ethiopia Restaurant (3821 S George Mason Dr. D, Falls Church, 703-347-9911; nazretethiopiarestaurant.com). The man — who is quite wealthy, says chef-owner Endalkachew Mekonnen — usually requests a spot in the corner of the dining room and politely asks the proprietor to keep the tables around him clear of other customers. He tries to eat early in the evening, or later at night, to avoid what passes for a crowd during the coronavirus pandemic.

“He tells me I can charge him any amount but usually we don’t charge him” for the special accommodation, Mekonnen says. Instead, the businessman tips well, frequently handing the owner a C-note for his troubles.

Say what you want about the entitlement of the rich and their ability to bend the world to their will with the flash of a little cash. But when it comes to the warmth, culture and exchange of the Ethiopian table, this businessman is as bereft as the rest of us. The pandemic has cast its shadow over our lives for almost a year now, and it has been particularly cruel to the restaurant industry. I’d argue, though, that few cuisines have suffered as much as the one from East Africa — the one that’s so prominent on the streets of Washington and in many of its suburbs.


Chef-owner Endalkachew Mekonnen at Nazret. (The Washington Post)

Read more »

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UPDATE: Ethiopia May Engage Private Creditors After Debt Review

Ethiopia is looking to offset the impact of the pandemic on its economy. (Getty Images)

Bloomberg

Ethiopia may approach private creditors for debt talks after it reviews liabilities with official lenders amid security risks that are adding to investors’ worries.

The nation’s Eurobonds plunged the most on record last week after State Minister of Finance Eyob Tekalign said the government will seek to restructure its external debt under a Group of 20 debt-suspension program. With no details on how the decision would affect holders of Ethiopia’s $1 billion of 2024 Eurobonds, many investors responded by selling the securities.

Only after talks involving official creditors, which the International Monetary Fund is assisting with, will the government be able to inform other creditors on the “need for broader debt treatment discussions,” the finance ministry said in a press statement on Monday.

Yields on Ethiopia’s $1 billion of 2024 Eurobonds climbed 26 basis points to 8.85% by 1:50 p.m. in London after jumping 207 points on Friday to the highest since May. The premium investors demand to hold the nation’s dollar bonds rather than U.S. Treasuries widened 31 basis points to 807, compared with the 538 average for African sovereign issuers, according to JPMorgan Chase & Co. indexes.

“In theory, a common framework should speed up the debt restructuring process, but it remains to be tested,” Morgan Stanley & Co. analysts Jaiparan Khurana and Simon Waever said in a note. “Questions around enforceability of the MoU terms to the private sector still persist, especially considering that the private sector is not a signatory.”

Ethiopia is the second African country after Chad to announce plans to review debt under the G-20 common framework, which aims to include China and private lenders into a global debt-relief push.

Ethiopia, like other African nations, is looking to offset the impact of the coronavirus pandemic on its economy. Ethiopia’s position is, however, exacerbated by fighting in the northern Tigray region and a border dispute with Sudan that’s threating to further destabilize the region.

“Possible implementation of the debt treatment under the Common Framework will address the debt vulnerabilities of the country, while preserving long-term access to international financial markets,” the finance ministry said in the statement. That will help in “unlocking more growth potential,” it said.

As with earlier bilateral debt relief, including via the Paris Club, Eurobond holders can choose not to participate in the program, according to the Morgan Stanley analysts. “The key issue would be how insistent bilateral creditors would be on the private sector participating,” they said.

Related:

Ethiopia to Seek Debt Relief Under G20 Debt Framework – Ministry


Under the new G20 framework, debtor countries are expected to seek an IMF programme to steer their economies back to a firmer ground and negotiate a debt reduction from both public and private creditors.(Getty Images)

Reuters

Updated: January 30th, 2021

Exclusive: Ethiopia to seek debt relief under G20 debt framework – ministry

Ethiopia plans to seek a restructuring of its sovereign debt under a new G20 common framework and is looking at all the available options, the country’s finance ministry told Reuters on Friday.

G20 countries agreed in November for the first time to a common approach for restructuring government debt to help ease the financial strain of some developing countries pushed towards the risk of default by costs of the coronavirus crisis.

Chad became on Wednesday the first country to officially request a debt restructuring under the new framework and a French finance ministry told Reuters on Thursday that Zambia and Ethiopia were most likely to follow suit.

Asked if Ethiopia was looking to seek a debt restructuring under the G20 framework, Finance Ministry spokesman Semereta Sewasew said: “Yes, Ethiopia will look at all available debt treatment options under the G20 communique issued in November.”

Ethiopia’s government bond due for repayment in 2024 which it issued back in late 2014 saw its biggest ever daily fall. It plunged 8.4 cents on the dollar from roughly par to just under 92 cents.

Ethiopia is already benefiting from a suspension of interest payments to its official sector creditors through the end of June under an initiative between the G20 and the Paris Club of creditor nations.

Under the new G20 framework, debtor countries are expected to seek an IMF programme to steer their economies back to a firmer ground and negotiate a debt reduction from both public and private creditors.

Join the conversation on Twitter and Facebook.

UPDATE: Ethiopia Extends Deadline for New Telecom License Bids by a Month

Ethiopia's telecoms industry is considered the big prize in a push to liberalize the economy because of the huge size of the market, which serves more than 100 million people. (Photo: Ethio Telecom)

Reuters

Ethiopia has extended the deadline for telecom firms to bid for new operating licenses by a month to April 5, the sector regulator said on Monday, citing requests from interested companies.

The Horn of Africa nation’s telecoms industry is considered the big prize in a push to liberalize the economy because of the huge size of the market, which serves more than 100 million people.

Prime Minister Abiy Ahmed is pressing ahead with the auction of the new licenses and the sale of a 45% stake in state monopoly Ethio Telecoms, in spite of a military conflict in the northern Tigray region.

Firms will be required to submit their technical and financial bids by April 5, compared with a previous deadline of March 5, the Ethiopian Communications Authority said in a statement.

Winners will be given full operating licenses, but they will not be allowed to offer mobile phone-based financial services, government officials said last year.

They will also be required to set up their own network infrastructure, such as cellphone towers, they said.

Kenya’s top operator Safaricom, which has expressed an interest in a consortium with Vodafone and Vodacom, estimated in 2019 it would have to pay about $1 billion for a new license.

Other firms that have expressed an interest include South Africa’s MTN, Etisalat from the United Arab Emirates and France’s Orange SA.

Related:

Ethiopia Telecom Reports 12% Rise in H1 Revenue


The government said last year it will retain a 55% stake in Ethio Telecom, with 40% going to international companies and the remainder to local investors. (Reuters photo)

Reuters

Updated: January 22nd, 2021

State-run Ethio Telecom, expected to be partly sold off as Ethiopia liberalises its economy, reported a 12% rise in first-half revenue to end-December to 25.6 billion birr ($650 million), it said on Thursday.

The government said last year it will retain a 55% stake in Ethio Telecom, with 40% going to international companies and the remainder to local investors.

Ethio Telecom said mobile voice services contributed 49% of the revenue and data services some 26%.

The company plans to launch mobile money services soon, it said, but did not give a timeframe.

In June, the telecoms regulator said it had received 12 bids for two telecom licences the government plans to award to multinational companies.

The regulator has not given a deadline for when it will award the licences.

Ethiopia’s telecoms industry is considered the big prize in a push to liberalise the economy as a protected market which serves more than 110 million people.

($1 = 39.3650 birr)

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France Suspends Ethiopian Airlines Flights For Four Days Due to COVID-19 Violation

"Several shortcomings were noted on the arrival in France of flights of the Ethiopian Airlines company," the French transport ministry said in a statement. "It is up to the company to check that each passenger on board has a document showing a negative PCR (Covid-19) test," it added. (Photo via Twitter @flyethiopian)

AFP

The French government is suspending Ethiopian Airlines for four days over a failure to ensure passengers have had negative coronavirus tests, the transport ministry announced Wednesday.

“Several shortcomings were noted on the arrival in France of flights of the Ethiopian Airlines company,” the ministry said in a statement.

“It is up to the company to check that each passenger on board has a document showing a negative PCR (Covid-19) test,” it added.

France warned the Ethiopian flag carrier on Tuesday but, after fresh shortcomings on Wednesday, it “decided to suspend flights by the company from Thursday January 28 to Sunday January 31 inclusive,” the statement said.

French government spokesman Gabriel Attal had earlier Wednesday said Paris wants to consider a Europe-wide “strengthening of border rules” and “sanctions against airlines” outside the European Union which do not ensure the necessary virus checks on passengers.

Such sanctions could lead to “a temporary or definitive ban” on landing or taking off at French airports, he added.

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Watch: In New York Activists Rally to Save Ethiopian Coffee Shop in Bronx

The owners of Buunni Coffee say they will have to close by the end of January because they can't meet their landlord's rent demands. Activists are calling on state and city lawmakers to pass already proposed legislation to help businesses like Buunni survive. (Courtesy photo)

ABC 7 News

Activists Rally to Save Ethiopian Coffee Shop in Bronx

RIVERDALE, Bronx (WABC) — An Ethiopian coffee shop in the Bronx has become the center of a cry for help to save small businesses in danger of closing amid the pandemic.

The owners of Buunni Coffee say they will have to close by the end of January because they can’t meet their landlord’s rent demands.

Activists are calling on state and city lawmakers to pass already proposed legislation to help businesses like Buunni survive.

“Small businesses faced serious problems before COVID, and now the pandemic has brought us to a breaking point,” Sarina Prabasi, co-founder of Buunni Coffee, said. “This is not about any one business. It’s beyond time to create bold, comprehensive support for the smallest of businesses and our workers. We have an opportunity to address long-standing inequities, to level the playing field and to invest in our neighborhoods for the long term. But this will take courage and political will from our elected representatives.”

Those at the rally said Buunni has been a vital part of the neighborhood, a center for local activism, art, and music for the past three years.

“Immigrant-owned small businesses, such as Buunni Coffee, have become one of the biggest casualties of the COVID-19 pandemic with them closing at an alarming rate all across the City, including The Bronx,” Sen. Gustavo Rivera said. “The federal government’s inaction has left hard working businesses owners such as Ms. Prabasi at risk of losing their livelihoods and our borough in danger of a deeper economic crisis. I join local leaders and Riverdale residents in calling on our local government to fill the void left by Washington and enact legislation that will help businesses like Buunni Coffee to remain open and successfully recover from this unprecedented crisis.”

Related:

From the Birthplace of Coffee Cafe Buunni Serves Ethiopian Organic Specialty Coffee

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UPDATE: Ethiopia Telecom Reports 12% Rise in H1 Revenue

The government said last year it will retain a 55% stake in Ethio Telecom, with 40% going to international companies and the remainder to local investors. (Reuters photo)

Reuters

State-run Ethio Telecom, expected to be partly sold off as Ethiopia liberalises its economy, reported a 12% rise in first-half revenue to end-December to 25.6 billion birr ($650 million), it said on Thursday.

The government said last year it will retain a 55% stake in Ethio Telecom, with 40% going to international companies and the remainder to local investors.

Ethio Telecom said mobile voice services contributed 49% of the revenue and data services some 26%.

The company plans to launch mobile money services soon, it said, but did not give a timeframe.

In June, the telecoms regulator said it had received 12 bids for two telecom licences the government plans to award to multinational companies.

The regulator has not given a deadline for when it will award the licences.

Ethiopia’s telecoms industry is considered the big prize in a push to liberalise the economy as a protected market which serves more than 110 million people.

($1 = 39.3650 birr)

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Feleg Tsegaye of ‘Deliver Addis’

Feleg Tsegaye, founder of Deliver Addis. (Photo: Howwemadeitinafrica)

Face 2 Face Africa

The man behind Ethiopia’s first online restaurant delivery service changing how people dine

Feleg Tsegaye was born to exiled Ethiopian parents in the United States. When he was 24 years old, he moved to Ethiopia to start the country’s first-ever online restaurant delivery service. Prior to leaving the U.S, he worked at the US Federal Reserve Bank.

In 2015, he launched Deliver Addis, an online restaurant delivery service in Ethiopia which allows customers to place orders from their favorite restaurants and also discover new ones. For Tsegaye, it was his own way of not only creating jobs in his country of origin but to change the way Ethiopians dine.

“What really prompted me to pursue this was the fact that we were creating a completely new industry that did not exist in Ethiopia,” Tsegaye told How We Made It In Africa. “It’s about getting customers what they want in the convenience of their homes and offices. It’s also about generating business for small and medium enterprises – like restaurants that cannot afford space or a good location – and creating jobs for young people as back-office staff or drivers.”

Across Africa, businesses being operated solely online are fast gaining popularity on the continent. This has been largely due to the spread of internet connectivity across the continent. While in some countries internet usage is low, it is high in other states.

Playing a pioneering role in Ethiopia’s e-commerce sector didn’t come easy for Tsegaye. At the time, internet penetration was low and was largely a platform not known to many in the country. Nonetheless, he persisted and now controls a big share of the market.

He was also confronted with other challenges such as the absence of addresses, power outages and inadequate internet connection.

“Our first internet shutdown was when I was on a flight to the US,” he recalled. In 2016, Ethiopia declared a state of emergency due to political instability, resulting in the shutdown of internet connectivity in the country.

“As an e-commerce business, that’s pretty much the worst possible thing that can happen – and I wasn’t even there when it happened,” he said. Although the business was unprepared for the internet shutdown, Tsegaye took advantage of the situation to do some intensive servicing and maintenance of his delivery bikes.

While at it, he took steps to keep the business afloat by designing offline processes for ordering – by phone, or SMS, when available. This saw order volumes go up. In June 2020, he secured funding from the Impact Angel Network to increase its capacity and efficiency to bring on new products and services and expand market share.

Following growing demand due to COVID-19, he expanded his services to include an online marketplace that enables Ethiopian consumers to shop for groceries and other essential goods online.

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Hana Getachew, the Ethiopian-American Founder of Bolé Road Textiles

Hana Getachew, founder of the Brooklyn-based Bolé Road Textiles that sells home linens, fabric, pillows, and more, all hand-woven in Ethiopia. (Photo via Refinery29)

Refinery29

For Hana Getachew, the Ethiopian-American founder of Bolé Road Textiles, a love of textiles can be traced back to childhood, stemming from one garment in particular: her mother’s dress for the Mels, an Ethiopian tradition that takes place during a wedding ceremony. She remembers it in excruciating detail — from the olive green shade and the waist-cinching A-line silhouette, right down to the gilded threadwork and golden daisies.

“We’d always take it out and play with it. We were obsessed with it,” Getachew says. There were others, too, that she loved: dresses from friends and family, brought when they visited from Ethiopia. “In Ethiopia, weavers would come up with non-traditional syncopated patterns, with elements of symmetry and diamond designs. That has stayed with me, and I put a lot of it into my work today.”

Getachew speaks about her career as two different lives: her life as an interior designer (before she launched Bolé Road), and her life after. It’s the latter — as the mastermind behind the home decor brand inspired by her own connections to family and the African diaspora — that has granted her the liberty to experiment and express herself genuinely through a world enriched in color, shapes, textures, and patterns.
“I knew I was a good interior designer, but I felt like anyone could do it. It wasn’t unique to me; I wanted to find something that is essential to my soul,” she says about working at an architecture firm for almost 11 years, decorating commercial interiors and offices. “One day, my coworker told me her friend quit her full-time job to work on her pillow business. And I was like, Yes, that’s what I’m gonna do.”


Bolé Road Textiles


Bolé Road Textiles

The concept for Bolé Road lived in her mind for almost eight years before she found the courage to execute it. In 2008, the same year Getachew’s ideas were growing, everyone around her was losing their jobs, which led many of them to dream-chase and become entrepreneurs. “The maker movement,” she proclaims. “I’m very risk-averse, which is not a good trait as an entrepreneur. That’s why I didn’t leap into this, but when I saw a whole movement happening, I thought maybe I could do this too.”
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Getachew left her career in interior design in 2014, but spent years prior to that preparing for the transition. She took free business classes at NYC Small Business Services and scouted artisans through word of mouth, the internet, and asking around in Ethiopia. A year later, she officially launched her brand on the same day as the Brooklyn Designs annual show. (The best piece of advice she received: “Just start, don’t overthink it.”)

“It was an amazing event, and it was an incredible way to launch, rather than hit publish on a website and wait,” she says, likening the experience to a graduation, being surrounded by family, friends, and former coworkers. “Those kinds of events are really great for understanding how people respond to [your product] and getting your first round of feedback.”

Everything about Bolé Road revolves around intention, identity, and gratitude to the heritage and community that supported Getachew most, from the colors and patterns inspired by Ethiopian landscapes to the name of the company.

Read more »

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Ethiopia Gets Debt Deadline Extension; Says Election To Be Held in June

Getty Images

Reuters

Paris Club of creditors: Ethiopia gets debt deadline extension

PARIS (Reuters) – Ethiopia will get a deadline extension for its debts, with a new deadline set at June 30, 2021, said the Paris Club of international creditors on Thursday.

The members of the Paris Club involved in the reorganisation of Ethiopia’s debts are France, Italy, Japan, the Republic of Korea and the Russian Federation.

Ethiopia says national election to be held in June

By Reuters Staff

ADDIS ABABA (Reuters) – Ethiopia will hold a parliamentary election on June 5, the electoral board said on Friday, as Prime Minister Abiy Ahmed seeks to quell political and ethnic violence in several regions.

Abiy’s Prosperity Party, a pan-Ethiopian movement he founded a year ago, faces challenges from increasingly strident ethnically-based parties seeking more power for their regions.

Africa’s second most populous nation has a federal system with 10 regional governments, many of which have boundary disputes with neighbouring areas or face low-level unrest.

In the northern Tigray region, thousands of people are believed to have died and 950,000 have fled their homes since fighting between regional and federal forces erupted on Nov. 4. Tigray held its own elections in September in defiance of the federal government, which declared the polls illegal.

The National Electoral Board said next year’s calendar for polls did not include an election in Tigray. It said the date for a Tigray vote would be set once an interim government, which was established during the conflict, opened election offices.

The national vote was postponed from August this year due to the coronavirus crisis. The head of the winning party becomes prime minister.

For nearly three decades until Abiy’s appointment, Ethiopia was ruled by a coalition of four ethnically-based movements dominated by the party from Tigray. That administration ruled in an increasingly autocratic fashion until Abiy took power in 2018 following years of bloody anti-government street protests.

The initial months after Abiy’s appointment saw a rush of political and economic reforms, including the release of tens of thousands of political prisoners.

‘RESTORING PEACE’

Abiy merged three of the main regional parties last year to form the Prosperity Party. The fourth, the Tigray People’s Liberation Front (TPLF), refused to join.

Voter registration for the June vote would take place from March 1 to 30, the electoral board said.

Abiy’s peace deal with Eritrea, which won independence from Ethiopia in 1993 after years of conflict, helped earn him the Nobel Peace Prize in 2019. But his moves to loosen the Ethiopian government’s iron grip was followed by outbreaks of violence as regional politicians and groups jostled for resources and power.

Abiy ordered troops to the western Benishangul-Gumuz region, which borders Sudan, on Thursday after attackers torched homes and killed more than 200 people in a village.

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Q&A: Meet Semhal Guesh, Ethiopian Architect-Turned-Manufacturer Produces Leather Bags for Export Market

Semhal Guesh, CEO of Kabana Leather, an Ethiopian company that produces a variety of handmade leather products. (How We Made It In Africa)

How We Made It In Africa

We speak to Semhal Guesh, CEO of Kabana Leather, an Ethiopian company that produces a variety of handmade leather products.

1. How did you come up with the idea to start Kabana Leather?

The concept was born while I was making hand bracelets from leather waste while at university. After two or three failed attempts at running other businesses, I established Kabana in 2017.

Initially, it was just a hobby. I am an architect by profession and love designing. My passion for design led me to make leather bags. My hobby became a business when I employed someone and saw the impact it made on their life. I quit my job at an architectural firm to run Kabana full-time.

We produce products under our own brand Kabana and also have a contract manufacturing division which makes items for international labels. We used to be 100% focused on the export market until Covid-19 hit and it tested us economically. Afterwards, our target market partially shifted towards the local market. Our customers are people and corporates who source ethically produced goods.

2. Give us an overview of your product range.

We have tote bags, gym bags, wallets and work bags.

We are currently also producing PPE products, such as face masks and scrubs, with support from the Mastercard Foundation, but this is temporary.

3. Where do you source your raw materials?

Close to 92% of our raw materials are locally sourced; these include leather from sheep and goats, textiles and canvas. The remaining 8% of raw materials are imported from Egypt, the US and Taiwan, including zippers, buckles and accessory hardware. We source leather directly from the factories and produce it according to our colour and texture specifications. We choose these factories based on our requirements regarding their sustainability, environmental footprint and zero child labour practices.


Employees at the Kabana Leather production facility. (Kabana Leather)

4. Describe your product development process.

For our Kabana brand, we try to have launches twice a year. Design starts with a mood board with colours, material concepts and design. Usually, I work with my team to develop patterns and designs. We make samples and get feedback on these. We then manufacture our selection for the launches.

On the outsourced manufacturing side, we obtain designs from buyers who want products made in Ethiopia. We make samples using their designs with potential alternatives. The approval process usually takes several iterations and discussions; once they approve a sample, we go ahead and manufacture based on purchase orders.

5. Where do you sell your products?

Currently, the bulk of our sales are to the US and we send small consignments to Europe but that has not expanded as much as we’d like. We also sell small quantities to Rwanda and South Africa.

Read the full Q&A at howwemadeitinafrica.com »

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Marcus Samuelsson on Restaurants in 2020: Fear, Change—and Hope – WSJ

The owner and chef of Red Rooster says Covid-19 has forced a rethinking of the business. (Photo: Marcus Samuelsson helping to distribute food at his Red Rooster restaurant in Harlem, part of an effort with World Central Kitchen during Covid/PACIFIC PRESS/ZUMA PRESS)

The Wall Street Journal

By Marcus Samuelsson

The owner and chef of Red Rooster says Covid-19 has forced a rethinking of the business

This year, the restaurant industry was flipped on its head. Covid-19 disrupted our way of life, throwing everyone in the supply chain—from the farmers who grow our food to the chefs who turn it into the masterful dishes that end up on our plates—into a season of disarray and fear.

Nearly 100,00 restaurants were shut down across the country, and here in my city of New York, more than 1,000 restaurants—some of which had served New Yorkers for decades—closed permanently.

The painful losses of Covid-19 also affected us restaurateurs on a personal level. My friend and colleague Floyd Cardoz was one of the first prominent chefs to pass from the virus. Countless other chefs, cooks and servers also suffered from the virus, forcing us all to come to terms with the fragility that is life, and the importance of using every day as my friend Floyd did: to make this industry, and our world, a better place.

This revelation is one of the most important and motivating outcomes of Covid-19. In New York, while restaurant owners navigated managing a restaurant during unfathomable circumstances, many also worked to serve the community. At Red Rooster, we joined with World Central Kitchen to feed everyone in need: schoolteachers, construction workers, cooks, servers, health-care workers, Harlem youth facing food insecurity, and other vulnerable communities, throughout the shutdown. What it means to be a part of and in service to your community has radically changed during this pandemic.

It has also changed how guests and restaurant workers interact with one another. The essential labor that so many diners never noticed before became visible, as did the inequalities that pervade the American food system. Patrons were forced to confront the importance and significance of restaurants in their lives, and across the nation, while leading chefs are rethinking the role of the restaurant—from what we represent in our communities to how our institutions can provide comfort and community, whether in person at a smaller capacity, or through delivery services.

For us, the future of our industry is centered on the environment and sustainability, race and identity, and human rights and dignity for all. The restaurant has long served as a place where humans from every corner of the Earth could come together to discuss such topics. This year, however, the pandemic has imposed a new framework: How do we remain a place where folks can celebrate life’s pleasures, discuss difficult issues and enjoy incredible meals, when we ourselves are struggling?

The pandemic has forced the food industry to confront key issues of racism and power, such as how immigrants and people of color are often the backbone of America’s most prominent restaurants, yet are often paid and treated inequitably. In my new book, “The Rise: Black Cooks and the Soul of American Food,” we share recipes that reflect a transition from pain to glory. Though African-American chefs have been underrepresented and underappreciated in food media, their recipes and skill set are deeply embedded in the fabric of American cooking. Just as there’s no American history without Black Americans, there’s no food or future without us, either.

Our ability to create flavorful, comforting food in the face of continuing injustice and global challenges demonstrates that beauty can emerge alongside pain. However, there is no need for that sort of pain and injustice to continue. As the U.S. prepares for a new administration, the onus falls upon the incoming government to lead and support an industry that has thrived through struggle, yes, but deserves financial support that allows our industry to survive, grow and innovate. A better, tastier world can exist for all of us, along with a more equitable, kinder society.

As we look to a new year, I find myself in remembrance of those we’ve lost, thankful for community and hopeful for the change that will come as a result of the hard but essential lessons that have come from such a significant year. I’m encouraged by how our society and food industry have come together to build better, more equitable food systems and practices. Many of us have demanded more respect for farmers, particularly farmers of color, and we’ve spoken in support of restaurants that are safer, more just environments for women, queer people and people of color.

I’ve watched as major food corporations work to diversify their staff and create opportunities for new voices to lead in the industry. I’ve seen longtime chefs create culinary masterpieces amid unpredictable circumstances, bringing joy and full stomachs to their patrons. I’ve watched restaurants, including family-owned businesses and Michelin-starred restaurants, do everything in their power to serve thoughtful, hearty food to people who need meals. I’ve also seen our own industry organize through the Independent Restaurant Coalition to fight for the things our businesses need to survive from our government.

We, like so many others in this country, are demanding change and support. While it’s clear that some lawmakers are indeed listening, there is still much ground-level work to be done, and I’m hopeful that industry leaders, young activists and the patrons we love serving in our restaurants will continue pursuing this mission of change.

These national efforts lead me to believe that not only will our industry survive the impact of this monumental year, but we will be a better, more connected and more supportive group of culinary leaders. In the new year and years to follow, I foresee an industry that is led by women and people of color, and that amplifies the culinary expertise of the many cultures that have influenced American cuisine as we know it.

I hope to see more respect for everyone involved in the restaurant industry, from those working the dishwashers, to the farmers who lovingly grow and harvest our food, to the chefs and line cooks—many of whom increasingly struggle with mental-health challenges from the stressors of restaurant work—who are responsible for feeding millions of Americans each and every day. I look forward to a vibrant and thriving industry that takes nothing, especially the people we serve, for granted.

This year has challenged and changed us deeply, but it’s also exposed our most human capacity: to rise, with gumption, change and hope.

Related:

Marcus Samuelsson Named Guest Editor of Bon Appétit Magazine

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Forbes Names President Sahle-Work Zewde Among 100 Most Powerful Women

President Sahle-Work Zewde has been named among 100 Most Powerful Women in 2020 by Forbes magazine. (Getty Images)

Tadias Magazine

By Tadias Staff

Updated: December 10th, 2020

New York (TADIAS) — Forbes Magazine has named Ethiopia’s President Sahle-Work Zewde among 100 Most Powerful Women in 2020.

According to the magazine “the women on the 17th annual power list hail from 30 countries and were born across four generations. There are 10 heads of state, 38 CEOs and five entertainers among them. But where they differ in age, nationality and job description, they are united in the ways they have been using their platforms to address the unique challenges of 2020.”

This year’s list of distinguished women from around the world include U.S. Vice-President-elect Kamala Harris, New Zealand Prime Minister Jacinda Ardern, Taiwan’s president Tsai Ing-wen, Norwegian Prime Minister Erna Solberg, as well as U.S. Fair Fight founder and voting rights advocate Stacey Abrams.

Regarding President Sahle-Work the publication noted:

In October 2018, Sahle-Work Zewde became Ethiopia’s first woman president and the only serving female head of state in Africa.

A seasoned diplomat and veteran of the United Nations, Zewde was appointed with a unanimous vote by parliament.

In her first address to parliament, Zewde promised to be a voice for women and stressed the importance of unity.

The appointment joins a series of unprecedented shifts as part of Prime Minister Abiy Ahmed’s reforms focused on easing government control.

Traditionally a ceremonial role, Zewde’s appointment is a tremendously symbolic move for the conservative country, opening the door for gender parity.

You can see the full list at Forbes.com »

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Spotlight: The Media Firestorm Concerning AI Researcher Timnit Gebru & Google

Timnit Gebru, an internationally respected Google researcher, took to Twitter last week to air her mistreatment in the hands of Google officials who sought to silence her concerning her latest research that discovered racial bias in current Artificial Intelligence technology. (Photo via @GoogleWalkout/Twitter)

Tadias Magazine

By Tadias Staff

Updated: December 8th, 2020

New York (TADIAS) — Last week Ethiopian American Timnit Gebru– whom we have featured several time in Tadias including when she was a graduate student at Stanford University and was named by Forbes magazine among 21 incredible women behind artificial intelligence research that’s fueling new discoveries in the field — took to Twitter to air her mistreatment in the hands of Google officials who sought to silence her concerning her latest research that discovered racial bias in current Artificial Intelligence (A.I.) technology.

Judging by the widely circulated media coverage of the unfortunate episode and the manner in which Google handled the rushed dismissal of one of its top scientists and an internationally renown Ethical A.I. researchers in the world, to say that the corporation made a historical mistake and long-lasting damage to its well cultivated image as a forward-looking technology company is an understatement.

As The New York Times reported, Timnit, “a well-respected Google researcher said she was fired by the company after criticizing its approach to minority hiring and the biases built into today’s artificial intelligence systems. Timnit Gebru, who was a co-leader of Google’s Ethical A.I. team, said in a tweet on Wednesday evening that she was fired because of an email she had sent a day earlier to a group that included company employees. In the email, reviewed by The New York Times, she expressed exasperation over Google’s response to efforts by her and other employees to increase minority hiring and draw attention to bias in artificial intelligence.”


Timnit Gebru, a respected researcher at Google, questioned biases built into artificial intelligence systems. (The New York Times)

Wired magazine added: “Timnit Gebru’s tweets about the incident Wednesday night triggered an outpouring of support from AI researchers at Google and elsewhere, including top universities and companies such as Microsoft and chipmaker Nvidia. Many said Google had tarnished its reputation in the crucial field, which CEO Sundar Pichai says underpins the company’s business. Late Thursday, more than 200 Google employees signed an open letter calling on the company to release details of its handling of Gebru’s paper and to commit to “research integrity and academic freedom.”


“We have been pleading for representation but there are barely any Black people in Google Research,” says Timnit Gebru, who says she was fired Wednesday. (GETTY IMAGES)

In a scathing email to her colleagues at Google that was later published in full on the Silicon Valley news website Platformer, Timnit pointed out how top management at the company has not honored its commitment to employ more minority and woman professionals. “Your life starts getting worse when you start advocating for underrepresented people. You start making the other leaders upset,” her email stated. “There is no way more documents or more conversations will achieve anything.” She concluded: “So if you would like to change things, I suggest focusing on leadership accountability and thinking through what types of pressures can also be applied from the outside. For instance, I believe that the Congressional Black Caucus is the entity that started forcing tech companies to report their diversity numbers. Writing more documents and saying things over and over again will tire you out but no one will listen.”


Timnit Gebru, speaking at TechCrunch disrupt in 2018. (Getty Images)

As of today nearly 4,000 people including 1534 Google employees and 2196 academic, industry, and civil society supporters have signed an online petition titled “We stand with Timnit Gebru” and calling “on Google Research to strengthen its commitment to research integrity and to unequivocally commit to supporting research that honors the commitments made in Google’s AI Principles.”

Below are links to the stories from The New York Times, Wired magazine, Timnit’s email as published on the Platformer website as well as the support letter signed by thousands of her professional colleagues from around the world:

Google Researcher Says She Was Fired Over Paper Highlighting Bias in A.I. (NYT)

A Prominent AI Ethics Researcher Says Google Fired Her (Wired)

The withering email that got an ethical AI researcher fired at Google (Platformer)

We stand with Timnit Gebru (Google Walkout For Real Change)

Related:

Timnit Gebru: Among Incredible Women Advancing A.I. Research

Spotlight: Blacks in AI Co-Founders Timnit Gebru & Rediet Abebe

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NYT Features Anna Getaneh’s African Mosaique in Ethiopia

Anna Getaneh, a former fashion model in Paris and New York, opened African Mosaique [in Addis Ababa] almost four years ago in a home her father had built. (NYT)

The New York Times

An Ethiopian Boutique Showcasing Artisanal Design

Not far from Addis Ababa’s British Embassy, in a quiet residential enclave just off a busy thoroughfare, stands a lovely tree-shaded villa. It’s here that Anna Getaneh opened her boutique, African Mosaique, almost four years ago, in a home her father had built and where she spent some of her childhood years.

Past the garage — now a coffee shop — and the foyer are erstwhile living and dining areas: airy showrooms for a gallery-worthy display of Ms. Getaneh’s diaphanous dresses, patterned blazers and colorful accessories, which incorporate traditional Ethiopian fabrics and craftsmanship, filtered through Ms. Getaneh’s global lens.

“My starting point is textiles,” she said. “I grew up appreciating fabrics, and what kind of colors and what kind of motifs are worn, and their significance. I always felt that these are such great stories to share and tell.”

Many of the designs on display incorporate shema, an Ethiopian handwoven fabric, and kitenge, the African wax print fabric popular across much of the continent. For example, a brightly colored long dress made of kitenge is priced at 4,500 Ethiopian birr, or about $120, while a white shema woven dress is 3,000 birr, or about $80.

But the fabric is merely a starting point. “I love being able to use basic fabrics and adding value; we do embroidery, we do beading, which is really what our story is here in Africa,” Ms. Getaneh said. “You hear about artisanal work in the rest of the world, and that’s luxury — couture is all handmade, for example. Whereas here, that value has never been a given.”

The boutique’s international sensibility makes sense, given that African Mosaique’s origins are many miles and many years removed from its current setting in Ethiopia’s capital.

The daughter of a career diplomat and a fashion designer, Ms. Getaneh was born and raised overseas; as a model, she spent nine years working in Paris and New York. It was in New York that she founded the Ethiopian Children’s Fund to build schools in rural Ethiopia, which led to the 1996 opening of a fund-raising fashion showcase she named African Mosaique.

“I wanted to do something different. I didn’t want to show images of dying children, of problems, of war and all the turmoil that we have in Africa,” she said. “I wanted to put the spotlight on something positive.”

Read more »

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Ethiopia To Take Major Step to Open Phone Market

A boy administers the charging of phones at a bar in Humera, Ethiopia, on Nov. 22. (Getty Images)

Bloomberg

By Simon Marks and Samuel Gebre

Long-Isolated Ethiopia To Take Major Step to Open Phone Market

Ethiopia will start accepting proposals for two new telecommunication licenses from Friday, a major step toward opening Africa’s second-most populous country to international operators.

Eyob Tekalign, the state minister responsible for the privatization process, confirmed the move even as the government wages a military conflict in the country’s northern Tigray region.

Ethiopia has been looking to auction the licenses since mid-2018, though the complexity of the process and challenges such as the Covid-19 pandemic have caused a series of delays. MTN Group Ltd., Africa’s largest carrier by subscribers, said last week it sees the investment case weakening due to uncertainty over whether international tower companies would participate and a mobile-money license be included.

Operators will be informed on Friday about the terms of the auction and what the government expects from them in terms of financial and technical offerings.

South Africa’s Vodacom Group Ltd. has said it’s monitoring the conflict between the government and Tigray before making its final decision, having earlier said it would bid in a consortium with Vodafone Group Plc and Kenya’s Safaricom Plc. Orange SA is another to have expressed an interest.

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Ethiopia: 45% of telecoms company Ethio to be sold off, despite conflict in the north


Privatising the Ethiopian telecoms sector should bring lower prices for users. (Photo: SIPA)

The Africa Report

Privatising the Ethiopian telecoms sector should bring lower prices for users/Caro/Trappe/SIPA
Foreign investors are queuing up to invest in Ethiopia’s telecoms sector, which will soon bid adieu to the state monopoly. However, the rules of the road are not yet clear, and conflict in the north may put things on hold.

The privatisation of the Ethiopian state’s monopoly on the telecoms sector – the last on the continent – is crucial to Prime Minister Abiy Ahmed’s liberalisation agenda and to attracting foreign investment as the country opens up. The government is preparing to sell a 45% stake in Ethio Telecom to investors and to issue two new telecoms licences, even as the current war against the Tigray region continues.

“It is 40% to all interested bidders and 5% will be dedicated to Ethiopians. The 55% will remain with the government of Ethiopia”, an advisor to the minister of finance told Reuters. It should occur within the next nine months hope officials, though analysts have been more cautious, given that the war in the north has seen swathes of the national communications network silenced.

If the privatisation is successful, it should lead to billions of dollars of investment in the sector, a rapid drop in prices and competition to deliver speedy internet and other services.

With a population of 109.2 million and increasing needs in information and communications technology (ICT), the country represents a huge and growing market for potential investors. The number of mobile users alone rose by 7.2 million, or 18%, between January 2019 and 2020, bringing the total to 46.8 million.

There is a largely untapped market, a willing government and big demand, so what could go wrong? A civil conflict that sets the northern Tigray region against the centre is certainly not the noise that investors like.

In addition, there has been policy fluctuation. Confusion ensued after recent reports from news outlets announcing the barring of foreign companies from participating in the ­infrastructure side of the telecoms market.

When the liberalisation was announced, foreign operators including Orange, Vodacom, Safaricom and MTN, and telecom infrastructure companies like Helios Towers expressed interest. Ethio Telecom has been adamantly opposed to the latter’s potential entry into the market and was ultimately supported on this by the Ethiopian government.

It is, however, unclear how long the ‘home team’ will be able to affect regulation in the face of opposition from the Ethiopian Communications Agency (ECA), the sector’s new regulator. Having invested massively in infrastructure, Ethio Telecom fears the competition if all aspects of the sector are liberalised. Following a meeting with key stakeholders in the sector on 7 September, Abiy confirmed plans to go ahead with the opening-up process.

Leasing of infrastructure

The new draft licensing directive from the ECA sets out plans for the lease of the existing infrastructure to the newly licensed operators, and in the long term would create the possibility for the operators to build their own. This could be an important source of revenue for Ethio Telecom, especially in the first few years, while operators set up their infrastructure.

ECA director Balcha Reba told reporters that there should be several access options for new entrants: “sharing from existing infrastructure, having a tower company (infraco/ third party) providing infrastructure, an infrastructure-sharing agreement between the new entrants, […]or building your own infrastructure”.

He also cautioned that there might be “technical limitations” as “existing masts may not have been designed to cater to the additional load”. The government is currently assessing Ethio Telecom’s infrastructure capacity with the help of the consultants at Deloitte. The ECA’s upcoming directives are expected to clarify the way forward.

A source close to Ethio Telecom tells The Africa Report the parastatal is upgrading its infrastructure and implementing reforms to prepare for competition. The company has split its network infrastructure into five and has separated its technical department from its service departments for greater efficiency. Things seem to be looking up, with a 34% increase in profits announced for the first six months of the 2019 budget year. This could be the driving force behind the new tariff cuts on internet and voice calls.

It is not yet clear which companies will bid for the Ethio Telecom stake. However, “the infrastructure projects currently under way are using Chinese-manufactured technology, including from Huawei. We should let the operators bring compatible material, especially in the context of the US sanctions on Huawei,” the source said.

Ethiopian telecoms specialist Terrefe Ras-Work argues that the privatisation “timing is off”. “We first need economic and political stability. […] If we are selling because of debt, let’s at least do it at a better time.” Covid-19 and the country’s debt are slowing economic growth and elections scheduled for October have since been postponed.

Alexander Demissie, the founding director of the China Africa Advisory, points out that “it is too late [to delay the liberalisation]. Ethio Telecom has borrowed $3.1bn from China to build its infrastructure and has only paid a small portion.”

No cash cow

Consultant Fentaw Abitew issued a warning to potential investors in Ethio Telecom, saying ‘There is a myth – and it is a myth – that Ethio Telecom is a cash cow providing positive annual revenue.’ She went on to say that, despite the Chinese loan for infrastructure, ‘services have remained terrible’.

The 12 expressions of interest that the government received by June for the two new licences included those from the Global Partnership for Ethiopia (a consortium composed of Vodafone, Vodacom and Safaricom), the Emirati company Etisalat, Madagascar’s Axian, South Africa’s MTN, France’s Orange, Saudi Telecom Company, South Africa’s Telkom and Zimbabwe-based Liquid Telecom. So far it is the heavyweights – Vodafone and partners, Etisalat, MTN, Orange and Saudi Telcom – who are seen as having the best chance of winning.

They, and those that will bid for a stake in Ethio Telecom, will be watching eagerly as the battles over the future of the sector are fought out by the different players in the administration and telecoms ecosystem.

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Spotlight: Marcus Samuelsson’s New Book ‘The Rise’

“All of that food comes from Africa, has its roots in Africa,” says the Ethiopian Swedish writer and restaurateur. “Everyone has had African American dishes, whether they know it or not.” Samuelsson is hoping to educate Americans and champion Black chefs in “The Rise: Black Cooks and the Soul of American Food” from Little, Brown and Company’s Voracious imprint. (AP photo)

The Associated Press

Chef Marcus Samuelsson celebrates the variety of Black food

NEW YORK (AP) — If anyone asks chef Marcus Samuelsson what African food taste like, he has a ready answer: Have you ever had barbeque? Rice? Collard greens? Okra? Coffee?

“All of that food comes from Africa, has its roots in Africa,” says the Ethiopian Swedish writer and restaurateur. “Everyone has had African American dishes, whether they know it or not.”

Samuelsson is hoping to educate Americans and champion Black chefs in “The Rise: Black Cooks and the Soul of American Food” from Little, Brown and Company’s Voracious imprint.

The book has 150 recipes inspired by Black chefs, writers and activists, and includes profiles of 26. The recipes celebrate the legacy of Africa, the influence of migration and integration, and where cutting-edge Black chefs are going next.

“When I look at American food and I look at the Black experience, we’ve done so much but almost got erased,” says Samuelsson, the chef of Harlem’s famed Red Rooster. “There’s never been a better time to tell those stories.”

The book — with essays by Osayi Endolyn and recipe development by Yewande Komolafe — is a rich mix of stories and food, from citrus scallops with hibiscus tea to oxtail pepperpot with dumplings. As Samuelsson writes in the introduction: “This isn’t an encyclopedia. It’s a feast. And everyone’s invited.”

Readers will learn how Los Angeles-based chef Nyesha Arrington’s cooking draws on family history from Mississippi and South Korea. They’ll learn it takes just 45 minutes to make Eric Gestel’s chicken liver mousse with croissants, a dish informed from his years cooking at the acclaimed Le Bernardin. And they’ll learn how Mashama Bailey is reinventing traditional Southern dishes.

“Our pasts are so unique and it’s so important to tell,” says Samuelsson. “We needed to tell our very layered and beautiful, non-monolithic journey.”

Samuelsson notes that many cookbooks celebrate European and Asian foods but hardly bring up Black dishes, meaning we know more about ricotta than ayib, the fresh cheese of Ethiopia.

“This is America’s past. So for me, as much as we learn about Japan, as much as we learn about Italy and Spain and so on, wouldn’t it be great to learn about our own food? This is America’s food,” he says.

Samuelsson compares the food in the book to popular music. He looks at New Orleans and hears the influence of France, Haiti, Africa and Spain — he hears jazz. Black food is no different.

“It comes from the continent first and then it lands here. And then, whether we went North or stayed in the South or went out West, it’s going to have a different journey — a different flavor profile to it — depending on who we met and who we got together with,” he says.

The book took four years to make and had to grapple with the pandemic and the Black Lives Matter movement. Samuelsson says in his author’s note that the effects of COVID-19 will stay in the Black community for longer than elsewhere and that the nation must also fight the virus of systemic racism. But he marvels at the resiliency of the Black community and says “Black food matters.”

“We still will cook,” he vows. “Black food has always been controversial because the way we were brought here to work, the food and the land. We have always had to do it through different lengths and a different set of rules.”

Readers will learn how wide and rich the food rooted in Africa can be, from the use of venison to pine nut chutney to roti. They’ll learn that benne seeds are a delicious alternative to sesame seeds and make a vinaigrette sing.

“Whether this is your first experience making African-inspired dishes or you’re familiar with them, my hope is this book will spark an interest — or continue one — and you’ll want to learn more about the people redefining and celebrating this cuisine,” said Endolyn.

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TOP 100 Ethiopian Restaurants in US: Yelp

Yelp states: "We identified businesses in the Ethiopian category, then ranked those spots using a number of factors including the total volume and ratings of reviews between January 1, 2015 and July 20, 2020. When available, all businesses on this list have a passing health score as of July 2020." (Photo: Yelp)

Yelp

By Helina Wolde Medhin, Senior Community Director II, Yelp Los Angeles

Ethiopia. Birthplace of coffee. Source of the (Blue) Nile. Home to ancient archaeological treasures. There are so many unique aspects that make up the rich culture and history of this diverse, never-colonized East African nation. But perhaps the most universally celebrated feature that connects Ethiopia to the world is its deliciously distinctive colorful cuisine.

Top 100 Ethiopian Restaurants in the U.S. According to Yelp Methodology:

We identified businesses in the Ethiopian category, then ranked those spots using a number of factors including the total volume and ratings of reviews between January 1, 2015 and July 20, 2020. When available, all businesses on this list have a passing health score as of July 2020.


Shebelle Ethiopian Cuisine & Bar (Dallas, TX) – Shebelle E

1. GS Cafe and Ethiopian Cuisine (Covina, CA)
2. Selam Ethiopian & Eritrean Cuisine (Orlando, FL)
3. Enat Ethiopian Restaurant (Charlotte, NC)
4. St Yared Ethiopian Restaurant (Indianapolis, IN)
5. Abugida Ethiopian Cafe & Restaurant (Charlotte, NC)
6. Shewhat Addis Restaurant (Oakland, CA)
7. Addis Restaurant (San Diego, CA)
8. Derae Restaurant (Memphis, TN)
9. Lucy Ethiopian Restaurant & Lounge (Houston, TX)
10. Enatye Ethiopian Restaurant (Herndon, VA)

Read the full list at blog.yelp.com »


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Fashion Spotlight: Amsale Unveils Fall 2021 Collection

Founded by Amsale Aberra and Neil Brown, The Amsale Group is one of the world’s leading luxury bridal houses, and widely credited as the inventor of the modern wedding dress. A Black-owned business headquartered in New York City with a salon on Madison Avenue. (Photo: Courtesy of Amsale)

Press Release

AMSALE UNVEILS ITS FALL 2021 BRIDAL COLLECTIONS TO CELEBRATE THE COUTURE CRAFTSMANSHIP OF ITS NYC ATELIER

NEW YORK, October 7, 2020 — This season, AMSALE celebrates couture with a range of collections that bring the focus back to impeccable craftsmanship and tailoring—the foundation on which the fashion house was built. “The collections are very tightly edited, but each piece is special and especially considered for each different bride,” says AMSALE Design DirectorMargo Lafontaine. “The current times have given extra meaning to getting dressed up—so there’s a little more drama, a little more attention to detail, craft and texture.” The Fall 2021couture collection was produced entirely in AMSALE’s Manhattan atelier and—along with newLittle White Dress, Bridesmaids and Nouvelle Amsale styles—pays tribute to the brand’s three-decade-deep roots.

Amsale Couture Fall 2021

With wedding celebrations pared down, brides are looking to their gowns to up the wow factor.The Fall 2021 couture collection delivers, with dramatic embellishments like crystal-encrustedshoulder straps and stunning sashes that extend past the train. Yet there’s also an element ofsoftness, showing through in sheer textures and hand-painted details. The bold and refinedcome together in pieces like a sculptural one-shoulder gown with an asymmetrical back sashand a crepe gown with plunging backline and trailing streamers to the train. A cornerstone of thecollection is a convertible raffia stitched organza ballgown with removable bodice overlay. “Itgoes from strapless to jewel-neck with a cap sleeve,” Lafontaine describes. “In times like these,there’s a need for flexibility.”

Little White Dress Fall 2021

The design team upped the ante for the Little White Dress collection, previously most popularfor supporting events like the rehearsal dinner or brunch. “The gowns are more dressed up anddetailed than in past seasons, so that they can truly stand in for wedding gowns,” Lafontainesays. “Brides’ plans are changing and we want to be there to support them with the perfectpiece for a town hall elopement or backyard microwedding.” Classic, refined brides will love theduchess satin strapless gown with a circle skirt and back bow, while boho-leaning brides willgravitate toward the chic taffeta wrap dress. Design details like sheer lace and flutter skirtsmake each piece unique.

Amsale Bridesmaids Fall 2021

Lafontaine wanted to convey a sense of ease and casual elegance with this season’s gowns.Draped styles in the label’s signature crepe fabric, plus fluid Satin wrap dresses with cowl necklines or alluring criss-crossed back straps offer something soft yet sleek. Continuing theexploration of pairing matte and shine—first introduced last season—is a range of gowns thatcombine a fluid satin bodice with crepe skirt for a dual-tone appearance. Feminine touches likelong gathered sleeves complete the collection.

Nouvelle Amsale

AMSALE re-introduces its Spring 2021 Nouvelle Amsale collection this season to supportretailers who were shut down during the spring, but reinvigorates the range with six newshowstoppers. Each piece has one standout focal point, from an origami-inspired bow at theback of an architectural Mikado ballgown to a surprising sheer embroidered back on a stretchcrepe sheath. Garden-inspired twists give the gowns a softer touch and embellishments add afeminine feel. A brand-new jumpsuit is perfect for the modern bride getting hitched at city hall.

Amsale Fall 2021 from Amsale on Vimeo.

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UPDATE: Ethiopia Says GERD Dam Will Begin Generating Power in Next 12 Months

Water flows through Ethiopia's Grand Renaissance Dam as it undergoes construction work on the river Nile in Guba Woreda. (Reuters)

Reuters

Updated: October 5th, 2020

ADDIS ABABA (Reuters) – Ethiopia’s giant new hydropower dam on the Blue Nile will begin generating power in the next 12 months, the country’s president said on Monday.

“This year will be a year where the Grand Ethiopian Renaissance Dam will start generating power with the two turbines,” Sahle-Work Zewde said in a speech to parliament.

Ethiopia is locked in a dispute with Egypt and Sudan over its $4 billion Grand Ethiopian Renaissance Dam, which Cairo has said could threaten its main supply of water.

Ethiopia bans flights over dam for security reasons – aviation chief

Reuters

Updated: October 5th, 2020

By Dawit Endeshaw

ADDIS ABABA (Reuters) – Ethiopia has banned all flights over its giant new hydropower dam on the Blue Nile for security reasons, the head of its civil aviation authority said on Monday, as the president pledged the dam would begin generating power in the next 12 months.

The move could worsen Ethiopia’s dispute with Egypt and Sudan over its $4 billion Grand Ethiopian Renaissance Dam, which Cairo has said could threaten its main supply of water.

“All flights have been banned to secure the dam,” the director-general of the Ethiopian Civil Aviation Authority, Wesenyeleh Hunegnaw, told Reuters by phone. He declined to give more details on the reasons.

Later on Monday in a speech to parliament, Ethiopia’s president Sahle-Work Zewde said: “This year will be a year where the Grand Ethiopian Renaissance Dam will start generating power with the two turbines.”

She also said that work was underway to enable a second filling of the dam within the next 12 months.

In July, Ethiopia said it had achieved its first year of filling the dam thanks to rainfall in the area.

Ethiopian Prime Minister Abiy Ahmed told the United Nations last month that the country has “no intention” of harming Sudan and Egypt with the dam, days after Egyptian President Abdel Fattah al-Sisi reiterated his concerns over the project.

Last week, air force chief Major General Yilma Merdasa told local media that Ethiopia was fully prepared to defend the dam from any attack.

Ethiopia, Egypt and Sudan failed to strike a deal on the operation of the Grand Ethiopian Renaissance Dam before Ethiopia began filling the reservoir behind the dam in July.

The dam is at the centre of Ethiopia’s bid to become Africa’s biggest power exporter.

The structure is about 15 km (9 miles) from the Ethiopian border with Sudan on the Blue Nile – a tributary of the Nile river, which gives Egypt’s 100 million people about 90% of their fresh water.

The United States decided last month to cut $100 million in aid to Ethiopia amid the dispute over the dam. A U.S. State Department official who did not want to be identified told Reuters at the time that the decision to pause some funding to Ethiopia was triggered by concern over Ethiopia’s unilateral decision to start filling the dam before an agreement.

Related:

UPDATE: Ethiopia-Egypt War Over GERD Has Already Started. It’s in Cyberspace


Workers move iron girders from a crane at the Grand Ethiopian Renaissance Dam. (Getty Images)

Foreign Policy

SEPTEMBER 22, 2020, 6:41 AM

The conflict between Ethiopia and Egypt over the Grand Ethiopian Renaissance Dam has already started. It’s just happening in cyberspace.

It took only a few weeks to plan the cyberattack—and a few more to abandon the world of ethical hacking for the less noble sort. But they would do anything for the Nile, the four young Egyptians agreed.

With that, the group calling themselves the Cyber_Horus Group in late June hacked more than a dozen Ethiopian government sites, replacing each page with their own creation: an image of a skeleton pharaoh, clutching a scythe in one hand and a scimitar in the other. “If the river’s level drops, let all the Pharaoh’s soldiers hurry,” warned a message underneath. “Prepare the Ethiopian people for the wrath of the Pharaohs.”

“There is more power than weapons,” one of the hackers, who asked not to be identified by name, told Foreign Policy. Also, it was a pretty easy job, the hacker added.

A few weeks later and thousands of miles away, a 21-year-old Ethiopian named Liz applied red lipstick and donned a black T-shirt and jeans. She positioned her phone on her desk and started her own kind of online influence campaign: a TikTok video. She danced to a popular Egyptian song underneath the message, “Distracting the Egyptians while we fill the dam.”

“There’s no other country that can stop us,” said Liz, who has more than 70,000 followers on the app and whose taunting video was met with praise and threats. “It’s our right.”

Rarely have young people been so passionate about an infrastructure project. But the Grand Ethiopian Renaissance Dam, which will be Africa’s largest, is more than just a piece of infrastructure. It has become a nationalistic rallying cry for both Ethiopia and Egypt—two countries scrambling to define their nationhood after years of domestic upheaval. Many Ethiopians and Egyptians are getting involved in the only way they can—online—and fomenting the first African cyberconflict of its kind, one with far-reaching and long-lasting consequences.

Read more »

Related:

Trump Administration Confirms Cutting Aid to Ethiopia Over GERD (UPDATE)


(Getty Images)

The Associated Press

Updated: September 2nd, 2020

It was an unusual example of Trump’s direct intervention on an issue in Africa, a continent he hasn’t visited as president and rarely mentions publicly.

On the guidance of President Trump, the State Department said Wednesday that the United States was suspending some aid to Ethiopia over the “lack of progress” in the country’s talks with Egypt and Sudan over a disputed dam project it is completing on the Nile River.

It was an unusual example of Mr. Trump’s direct intervention on an issue in Africa, a continent he hasn’t visited as president and rarely mentions publicly. The dam dispute centers on two of Africa’s most populous and powerful nations, Ethiopia and Egypt, and some have feared it could lead to military conflict.

A State Department spokesperson told The Associated Press the decision to “temporarily pause” some aid to a key regional security ally “reflects our concern about Ethiopia’s unilateral decision to begin to fill the dam before an agreement and all necessary dam safety measures were in place.”

It is not clear how many millions of dollars in aid are being affected, or for how long. The decision was taken by Secretary of State Mike Pompeo “based on guidance from the president,” the spokesperson said.

There was no immediate comment from Ethiopia’s government. Ethiopia’s ambassador to the United States, Fitsum Arega, this week tweeted that his country was determined to complete the dam, saying that “we will pull Ethiopia out of darkness.”

Africa’s largest hydroelectric dam has caused severe tensions with Egypt, which has called it an existential threat and worries that it will reduce the country’s share of Nile waters. Ethiopia says the $4.6 billion dam will be an engine of development that will pull millions of people out of poverty. Sudan, in the middle, worries about the effects on its own dams though it stands to benefit from access to cheap electricity.

Years of talks among the countries have failed to come to an agreement. Key remaining issues include how to handle releases of water from the dam during multiyear droughts and how to resolve future disputes.

The United States earlier this year tried to mediate the discussions, but Ethiopia walked away amid accusations that Washington was siding with Egypt. Now the three countries are reporting any progress to the African Union, which is leading negotiations.

Ethiopia had said it would fill the dam with or without a deal with Egypt and Sudan. The dam’s 74 billion-cubic-meter reservoir saw its first filling in July, which Ethiopia’s government celebrated and attributed to heavy rains, while a startled Egypt and Sudan hurriedly sought clarification and expressed skepticism.

A former U.S. ambassador to Ethiopia, David Shinn, had warned against an aid cut, writing that “playing political hardball with Ethiopia will not only fail to obtain Washington’s desired result but will probably ensure that the Ethiopian diaspora in the United States rallies against Trump.”

Related:

Cutting Aid to Ethiopia Haunts Trump in Election


David Shinn, a former US envoy to Ethiopia said playing political hardball with Ethiopia will not only fail to obtain the desired result but will probably ensure that the Ethiopian diaspora in the US will rally against Trump and spoil his chances in the close contest. “There are sizeable Ethiopian-American communities in key states such as Georgia, Texas, and Virginia,” he said. (Image: Tulsa World)

AA

Addis Getachew | ADDIS ABABA, Ethiopia

Updated: September 2nd, 2020

Ethiopian-Americans against US cutting $130M aid to Ethiopia to enforce Egypt friendly agreement on sharing Nile waters

The US has now formally stepped in, to support Egypt and punish Ethiopia over the river water sharing dispute between the two African countries.

Last week, the Trump administration announced blocking a $130 million aid that had been earmarked to support Ethiopia’s defense and anti-terrorism efforts.

Secretary of State Mike Pompeo signed the cut in aid, ostensibly to build pressure on Ethiopia, a rugged landlocked country in the Horn of Africa.

While it is not clear to what extent the US decision will affect Ethiopia, but it has united everyone in the country and the diaspora.

“We have officially requested the US administration that they give us an explanation,” said Ethiopia’s Ambassador to Washington Fitsum Arega, while taking to Twitter.

David Shinn, a former US envoy to Ethiopia said playing political hardball with Ethiopia will not only fail to obtain the desired result but will probably ensure that the Ethiopian diaspora in the US will rally against Trump and spoil his chances in the close contest. “There are sizeable Ethiopian-American communities in key states such as Georgia, Texas, and Virginia,” he said.

Ethiopian government led by Prime Minister Abiy Ahmed had earlier rejected an agreement brokered by the US Treasury Secretary Steven Mnuchin in February related to the filling and operation of the $5billion Grand Ethiopian Renaissance Dam (GERD). Ethiopia said the US proposal was heavily tilted towards Egypt.

Relations between Cairo and Addis Ababa have strained over recent times, over the filling and operation of the dam that has come upon the Blue Nile, one of the tributaries of the River Nile.

Since June, the African Union has been mediating now to evolve a win-win formula between Ethiopia, Sudan, and Egypt.

The AU has entrusted its Bureau of the Assembly of Heads of State and Government including South Africa, Kenya, Mali, and Democratic Republic of Congo (DRC) to prevent any escalation between these countries. The European Union, the World Bank, and the US continue as observers in the group.

Read more »

Related:

Mike Pompeo is the Worst U.S. Secretary of State in History


Mike Pompeo’s handing of the Trump administration’s foreign policy “has led to some of the worst diplomatic damage the United States has suffered in decades — especially in relations with its closest allies,” writes The Washington Post’s Deputy editorial page editor and columnist Jackson Diehl. (Photo: The Washington Post)

The Washington Post

Updated: August 30, 2020

As secretary of state, Mike Pompeo has presided over the collapse of negotiations with North Korea, the failure of a pressure campaign against Iran and an abortive attempt to oust Venezuela’s authoritarian regime. On his watch, China has carried out genocide in its Xinjiang region and the suppression of Hong Kong’s freedoms without resistance from Washington until it was too late.

Pompeo has failed to fill dozens of senior positions at the State Department, and hundreds of career diplomats have left or been driven out in political purges. Morale is at a historic low: In staff surveys, there has been a 34 percent increase between 2016 and 2019 in those who say the State Department’s senior leaders “did not maintain high levels of honesty and integrity.” Maybe that’s because Pompeo himself has defied legal mandates from Congress, skirted a law restricting arms sales to Saudi Arabia, tasked staffers with carrying out errands for himself and his wife, and fired the inspector general who was investigating his violations.

Last week, Pompeo crossed yet another ethical line by speaking before the Republican National Convention, thereby disregarding the State Department’s explicit legal guidance against such appearances. The speech he delivered was weak and littered with false or simply ludicrous claims, such as that the recent diplomatic accord between Israel and the United Arab Emirates is “a deal that our grandchildren will read about in their history books.” Maybe if they major in Middle Eastern affairs.

With his ambitions likely fixed on a presidential candidacy in 2024, Pompeo is undoubtedly hoping most of the diplomatic disasters will ultimately be blamed on President Trump, especially if Trump loses the November election. But the former Kansas congressman should not get off so easy. Yes, it’s Trump’s foreign policy. But Pompeo’s steering of it has led to some of the worst diplomatic damage the United States has suffered in decades — especially in relations with its closest allies.

Read more »

Related:

Pompeo approves plans to halt aid to Ethiopia over Nile dam dispute


Getty Images

The Hill

08/28/20

Secretary of State Mike Pompeo has approved plans to halt some U.S. aid to Ethiopia, Foreign Policy reported on Friday.

The halt in aid comes as the U.S. mediates a dispute over a dam on the Nile River that’s pitted Ethiopia against Egypt and Sudan, according to Foreign Policy. The decision could impact up to $130 million of assistance to programs including security, counter-terrorism and anti-human trafficking.

“There’s still progress being made, we still see a viable path forward here,” a U.S. official told the magazine. “The U.S. role is to do everything it can to help facilitate an agreement between the three countries that balance their interests. At the end of the day it has to be an agreement that works for these three countries.”

The State Department did not immediately respond to a request for comment from The Hill.

Ethiopia and Egypt are at a standstill in negotiations over how the dam on a tributary of the Nile will be managed.

Egypt and Sudan, which depend on the Nile for much of their fresh water, are opposed to any development they say will impact the flow downstream, including the 6,000-megawatt power plant Ethiopia hopes to develop at the dam.

Is the Trump Administration Using Aid to Bully Ethiopia Over Nile Dam?


It’s too bad that the U.S. has decided to take the wrong side in a local African dispute regarding the Grand Ethiopian Renaissance Dam. As the following FP article reports the Trump administration is cutting off “some foreign assistance” to Ethiopia over GERD. The scheme may be intended to tip the scale in Egypt’s favor, but if history is any indication this kind of foreign intimidation does not work in Ethiopia. It’s also worth mentioning that the dam, a $4.5 billion hydroelectric project, is being fully funded by the Ethiopian people. (Getty Images)

Foreign Policy

U.S. Halts Some Foreign Assistance Funding to Ethiopia Over Dam Dispute with Egypt, Sudan, Some U.S. officials fear the move will harm Washington’s relationship with Addis Ababa.

Updated: AUGUST 27, 2020

Secretary of State Mike Pompeo has approved a plan to halt U.S. foreign assistance to Ethiopia as the Trump administration attempts to mediate a dispute with Egypt and Sudan over the East African country’s construction of a massive dam on the Nile River.

The decision, made this week, could affect up to nearly $130 million in U.S. foreign assistance to Ethiopia and fuel new tensions in the relationship between Washington and Addis Ababa as it carries out plans to fill the dam, according to U.S. officials and congressional aides familiar with the matter. Officials cautioned that the details of the cuts are not yet set in stone and the finalized number could amount to less than $130 million.

Programs that are on the chopping block include security assistance, counterterrorism and military education and training, anti-human trafficking programs, and broader development assistance funding, officials and congressional aides said. The cuts would not impact U.S. funding for emergency humanitarian relief, food assistance, or health programs aimed at addressing COVID-19 and HIV/AIDS, officials said.

The move is meant to address the standoff between Ethiopia and other countries that rely on the Nile River downstream that have opposed the construction of the massive dam project, called the Grand Ethiopian Renaissance Dam. Egypt sees the dam’s construction as a core security issue given the country’s heavy reliance on the river for fresh water and agriculture, and in the past Egyptian President Abdel Fattah al-Sisi has hinted his country could use military force to halt the dam’s construction.

Some Ethiopian officials have said they believe the Trump administration is taking Egypt’s side in the dispute. President Donald Trump has shown a fondness for Sisi, reportedly calling him his “favorite dictator” during a G-7 summit last year. Officials familiar with negotiations said the Trump administration has not approved parallel cuts in foreign assistance to Egypt.

Administration officials have repeatedly assured all sides that Washington is an impartial mediator in the negotiations, which mark one of the few diplomatic initiatives in Africa that the president has played a personal and active role in. These officials pointed out that Egypt has accused the United States of taking Ethiopia’s side in the dispute as well.

“There’s still progress being made, we still see a viable path forward here,” said one U.S. official. “The U.S. role is to do everything it can to help facilitate an agreement between the three countries that balance their interests. At the end of the day it has to be an agreement that works for these three countries.”

But the move is likely to face sharp pushback on Capitol Hill, according to Congressional aides familiar with the matter. State Department officials briefed Congressional staff on the decision on Thursday, the aides said, and during the briefing insisted that the U.S.-Ethiopia relationship would remain strong despite a cutback in aid because the United States can have tough conversations “with friends.”

“This is a really fucking illogical way to show a ‘friend’ you really care,” one Congressional aide told Foreign Policy in response.

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Hydropolitics Between Ethiopia and Egypt: A Historical Timeline


From top left: Emperor Haile Selassie, President Gamal Abdel Nasser, Prime Minister Meles Zenawi, President Hosni Mubarak, Prime Minister Hailemariam Desalegn and President Mohamed Morsi. (Photos: Creative commons)

Tadias Magazine

By Tadias Staff

Published: Tuesday, June 18th, 2013

New York (TADIAS) — Hydropolitics flare up is not new to Africa’s Nile Basin region. The world’s longest river, which flows northwards and criss-crosses eleven countries, has been a particular point of tension between Egypt and Ethiopia for a long time; especially when it comes to the equitable sharing of the water resource for economic development.

In 1959, the colonial-era Waters Agreement between Egypt and Sudan was signed before all the upriver countries had achieved independence — namely Tanzania (1961), Uganda (1962), Rwanda (1962), Burundi (1962), and Kenya (1963) — excluding Ethiopia from the deal. Emperor Haile Selassie who was incensed by the snub, responded by ending the Ethiopian Orthodox Church’s 1,600 year relationship with the Egyptian Coptic Orthodox Church in Alexandria.

According to a newly launched historical data visualization web site, TimeLine Ethiopia, the colonial era agreement had allocated 55.5 billion cubic meters of water annually to Egypt while Sudan was given 18.5 billion cubic meters, which represented 99% of the average annual flow of the Nile river.

That same year Haile Selassie decided to commission a $10 million American-led study entitled “Land and Water Resources of the Blue Nile Basin: Ethiopia.” The seventeen volume report finalized in 1964 served as the blueprint and beginning of Ethiopia’s mission to build multiple dams on the Blue Nile and its tributaries.

Egypt, under the leadership of Gamal Abdel Nasser, retaliated against Haile Selassie’s initiative by clandestinely supporting armed insurrections in the northern parts of Ethiopia in order to foment civil war and unrest in the country. According to Wikipedia Nasser was also simultaneously busy overseeing the construction of a high dam in Egypt to satisfy his country’s “ability to control floods, provide water for irrigation, and generate hydroelectricity seen as pivotal to Egypt’s industrialization.”

Fast forwarding to current times, when Ethiopia’s former Prime Minister Meles Zenawi re-initiated the project to accomplish unrealized ambitions for Ethiopia, Egyptian President Hosni Mubarak, did not welcome the effort.

In 2013 Ethiopia’s diverting of waters to complete the Grand Renaissance Dam project has been met by high-level Egyptian agitation including discussions of sabotage on live television.

Below is an interactive timeline of the Nile dispute courtesy of TimeLine Ethiopia.

Ethiopia & Egypt: Visualizing Nile Data – Access to Electricity vs Fresh Water


Nile Basin countries GDP, population, and hydroelectric power production data from The World Bank, World Development Indicators. (data.worldbank.org)

Tadias Magazine

By Tadias Staff

Updated: Saturday, June 15th, 2013

New York (TADIAS) – In 2009, over 99% of Egypt’s residents had access to electricity, while in Ethiopia, a country of 80 million, less than 18% of the population had access to power. In neighboring Sudan 35% of its roughly 30 million inhabitants received energy generated by the Nile river.

In 2011 the annual fresh water withdrawal in Egypt was recorded as 68.30 billion cubic meters. The same year Sudan also took in 37.14 billion cubic meters of fresh water. In comparison, Ethiopia’s withdrawal of fresh water for the same period was a meager 5.56 billion cubic meters.

These statistics come from the World Bank’s “World Development Indicators” and are now compiled by a newly launched website that employs data visualization and creative interactive timelines of Ethiopian history and current affairs.

“While working on my first historical item to publish, on the Solomonic Dynasty, the whole Nile issue exploded into the international news scene,” said Jomo Tariku, the site’s founder, who works as a designer and publishing officer at the World Bank’s Development Data Group in Washington, D.C. that includes the Open-Data team. “So I thought that was a perfect vehicle to do a data-based analysis, as much as possible, on facts and not emotions.”

Ethiopia and Egypt, next to Nigeria, are both among the top-three most populated countries in Africa. Jomo told Tadias that research driven stories are something he deals with on a daily basis, and he hopes that this would particularly assist journalists in providing a balanced coverage of the rather heated current exchange between the two nations on the Nile matter.

“Our main site and the most visited one at the World Bank is under our wing at data.worldbank.org,” Jomo said. “Our other popular asset that really makes the World Bank stand out compared to any organization that has vast amounts of data is our databank tool that lets you query our indicators and build your own analysis.”

Graph: Access to Electricity vs. Total Fresh Water Withdrawals (Source: data.worldbank.org)

“What inspired this project?” we asked Jomo. “Even though I have been meaning to do a data visualization site on the continent and Ethiopia, discovering a similar Ghanaian site really got me off my lazy chair,” Jomo said.

So what’s the next topic he is researching? “I will publish one on Abebe Bekila by Monday,” Jomo said. “I am sticking with Wikipedia and World Bank but I will be using any free data source I can find to generate the visualizations.”

You can learn more and add to the information at www.timelineethiopia.com.

Related:

Hydropolitics Between Ethiopia and Egypt: A Historical Timeline (TADIAS)

Law Professor Urges Ethiopia to Take Nile Issue to International Court (TADIAS)

Tom Campbell: America Would Be Wrong to Favor Egypt in Water Rift (OC Register)

Egypt’s Nile Threats Weaken Case to Secure Water: Shinn (Bloomberg)

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Meet Leah Bekele, VP at Warner Records

Leah Bekele, Vice President of Rhythm Promotion & Lifestyle at Warner Records. (COURTESY WARNER RECORDS)

Tadias Magazine

By Taias Staff

Published: September 3rd, 2020

New York (TADIAS) — Leah Bekele, Vice President at Warner Records, is another Ethiopian-American trailblazer in the U.S. music industry following in the footsteps of Ethiopia Habtemariam, the President of Motown Records.

Last week Leah, age 30, was named Vice President of Rhythm Promotion & Lifestyle at Warner Records becoming the youngest Black women to assume the executive position.

Leah, who was raised in the Washington, D.C. area, was born in Ethiopia before immigrating to the U.S. as a toddler with her parents. She is a graduate of Columbia College, Chicago where she studied Public Relations with a focus in Music Business. Prior to her appointment as VP at Warner Records Leah worked in New York City as Director of Lifestyle Promotions for Epic Records at Sony Music Entertainment.

“I am incredibly honored to be the youngest Black woman to be named Vice President of Rhythm Promotion & Lifestyle,” Leah said in a statement. She hopes “to continue to break barriers for young women of color in the music industry by helping to develop new talent and aiding the next generation of female executives through mentorship and volunteering in her free time.”

Related:

Warner Records Firms Up Urban & Rhythmic Team (Billboard Magazine)

Leah Bekele Becomes Warner Records’ Youngest Black Woman To Take On The Role Of Vice President Of Rhythm Promotion & Lifestyle (Forbes Magazine)

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Marcus Samuelsson Named Guest Editor of Bon Appétit Magazine

Marcus Samuelsson and Maya Samuelsson attend the New York Public Library 2018 Library Lions Gala at the New York Public Library at the Stephen A. Schwarzman Building on November 5, 2018 in New York City. (Getty Images)

Tadias Magazine

By Tadias Staff

Updated: August 18th, 2020

New York (TADIAS) — Celebrity chef, author and businessman Marcus Samuelsson has been named brand advisor and guest editor of the upcoming holiday edition of Bon Appétit magazine, America’s leading food and entertainment publication since it was launched in 1956.

“In his advisory role, a first for Bon Appétit, Chef Samuelsson will offer his insights on food culture globally, and help expand Bon Appétit’s food and recipe content,” the magazine said noting that the double issue covering the holiday season into the New Year, will hit the newsstands on December 1st and will appear on bonappetit.com the same day. “Chef Samuelsson will also advise Condé Nast on its growing global footprint within food media as he works with the company’s market and brand leaders to spearhead new initiatives and programming.”

The Editor-in-Chief of Vogue and Artistic Director of Condé Nast — the parent company of Bon Appétit — Anna Wintour said in a statement: “It’s an honor to welcome such a bold and brilliant culinary force like Marcus to the Bon Appétit team. He is a visionary and inspiration to so many in the food world and beyond, from aspiring entrepreneurs and home cooks to today’s most renowned chefs. We can’t wait for our audience to get cooking with him.”

Marcus Samuelsson added: “Now is a time of seismic change not only within our culinary world but in our communities at large and we have a responsibility and opportunity to come together to show how food is a reflection of our cultures, our societal values, and our individuality. I learned from working in restaurants at a young age that you’re nobody without your crew. To make a meaningful impact means both empowering the incredible talents around you and enlisting those you admire to share their stories and lend their voice. l’m looking forward to joining forces with Sonia and the team to work toward this greater goal.”

Below is is rest of the announcement courtesy of Condé Nast- Bon Appétit:

Chef Samuelsson is the acclaimed chef, cookbook author, TV personality, philanthropist and food activist behind the iconic New York City restaurant, Red Rooster Harlem. He has won multiple James Beard Foundation awards for his work as a chef and as host of PBS’s No Passport Required, his public television series produced with Vox/Eater. Samuelsson was crowned champion of Top Chef Masters and Chopped All Stars, and was the guest chef for President Obama’s first state dinner. During the COVID-19 pandemic, Samuelsson converted his restaurants Red Rooster Harlem, Marcus B&P in Newark, and Red Rooster Overtown in Miami into community kitchens in partnership with World Central Kitchen, serving well over 150,000 meals to those in need.

Bon Appétit is one the fastest growing brands within the Condé Nast portfolio. The top-rated food brand on YouTube has surpassed 6M subscribers since launching the channel in 2018. With 7M print readers, 10.6M digital unique visitors, 11.8M social followers and 141M video views, Bon Appétit’s audience is deeply connected to its content published across all platforms.

Bon Appétit won four ASME Ellies in 2020, including its third General Excellence win. The brand has been named to Advertising Age’s A-List for eight consecutive years, including Magazine of the Year in 2013 and 2017, Brand of the Year in 2015, and Digital and Video recognition in 2019. Bon Appétit has been named to Adweek’s Hot List every year since 2012, including Hottest Food Magazine in 2013, 2017, 2018 and 2019. Condé Nast Entertainment was awarded Digiday’s Best Use of YouTube for Bon Appétit’s channel in 2020.

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