Ethiopian Business Review

With the inauguration of Ethiopia’s largest cement plant, Derba Midroc Cement PLC in February 2012 and the expansion of Mugher and Messebo Cement Factories, the hyper- inflated cement market entered into a cutthroat price competition. Although the price of cement decreased from an average of more than 400 Birr a quintal to 160 at factories’ gate, the oversupply and saturation of the domestic market is pushing cement manufacturers to look for foreign markets. Since 60Pct of the cost of cement production goes to energy, which is largely generated from coal; it’s becoming evident that competing in the international market would only be feasible when energy-related constraints are resolved. EBR’s Samson Hailu explores the complex issue.

Monday, 16 June 2014 06:00
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With the introduction of the Growth and Transformation Plan (GTP) in 2010, special focus has been given to Ethiopia’s textile and garment industry. The country’s potential and distinct advantages in this field have made many excited about the prospects of growth. However, its performance in the past three-and-a-half years has been disappointing. The nation earned 244.2 million dollars from exports in three years while the target goal was 730 million dollars. As EBR staff writer Yoseph Mekonnen reports, lack of skill and work ethic, an absence of adequate infrastructure and raw materials,  and poor managerial know-how among industrialists are keeping the sector from reaching its full potential. 

Monday, 16 June 2014 03:00
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Over the last 20 years, China has grown at a rate of nearly 10Pct per year.  The growth was driven primarily by expansion of industrial and export-oriented sectors. This has opened the door for improved Ethio-China relations, which have witnessed unprecedented growth in the last decade. Whenever Ethiopia seek loan, technical assistance and investment, China responds positively by providing debt reduction and support with no political strings attached. 

The recent visit by Li Keqiang, Premier of the world’s second biggest economy, brought hopes of acquiring billions of dollars for cash-starved Ethiopian government. China’s promise to offer much-needed financing for several mega projects in Ethiopia comes at a crucial time. The old saying that ‘a friend in need is a friend indeed’ is perhaps a fitting one for relations between the two countries. Samson Hailu, EBR’s Research Editor ,explores the economic relations between the two countries and what China’s increasing presence and economic interest in Africa mean for Ethiopia and the continent at large.

Monday, 16 June 2014 03:00
Published in Economy & Finance
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Due to its ancient history, remnants of past civilizations, diverse cultures and natural beauty, Ethiopia has the potential to be a must-see destination for tourists. Yet, despite its abundance of historic and natural attractions, the country has not benefitted from a robust tourism industry. EBR Staff Writer Berihun Mekonnen explores that limitations on tourist site development and service deliveries, poor infrastructure, and weak promotion and marketing are hindering the prospects of making Ethiopia a world-renowned tourist destination.

Monday, 16 June 2014 03:00
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Government Officials and manufacturers have recently held discussions on the market challenges of metals and engineering companies particularly (car assemblies) in Ethiopia. The government blames the society for its impaired attitude about local products while the manufacturers accuse the government of taxing their products twice which contributes to their inability to compete. But the public says if people want to understand the culprit behind their rejection of new, locally assembled cars for much older, used imports one need look no further than the quality of the vehicles, access to maintenance and delivery of spare parts. In fact many people were at first proud of owning a locally made car, however they soon became jaded, writes Berihun Mekonnen, EBR’s editor-in-chief. 

Wednesday, 16 April 2014 06:00
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Recently it has been common to see a long queue of vehicles around petrol stations in Addis Ababa searching for fuel, particularly gasoline, commonly known as ‘benzene’. People including taxi drivers and other private vehicle owners run here and there filling up their tanks if they get lucky. The lineups near the stations have exacerbated the high traffic jams that are already annoying people throughout the city. 

Saturday, 15 March 2014 09:00
Published in Economy & Finance
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The saying; ‘a burnt child dreads the fire’ applies to many people who have given their money to real estate developers in Ethiopia because they have been burned repetitively. 

More than a few legally registered real estate developers have sold out the land, they have leased from the government to build homes, illicitly, pillaging millions of birr in profits in a villainous process. Then, several other developers who have made promises and deals to deliver finished houses were not able to finish the job on time. They made their clients wait in vain and incur extra costs. Still today, there are some real estate companies that collected pre-payments over seven years ago and haven’t delivered the houses yet.  

Saturday, 15 February 2014 06:00
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For Americans, the beginning of 2014 marked the launch of a new healthcare system popularly known as “Obamacare”. This health insurance coverage is expected to cut the number of uninsured in half, or about 25 million people, in the next 10 years. Under the much publicized scheme, the US government plans to reshape the healthcare system by allowing as many as seven million people to buy insurance and 8.7 million new beneficiaries to enroll in 2014 alone. 

Saturday, 15 February 2014 06:00
Published in Society
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Many Ethiopian migrants, who send money for their relatives and families from abroad, previously paid an average of 12 Pct of the remitted amount for the money transferring agents.  Sending remittances to Ethiopia, which is one of the top 10 remittance receiving countries in Sub-Saharan Africa, has been costly though the amount varies depending on the remitted amount, the service chosen and the destination. The cost of a money transfer for an average transaction in Ethiopia ranges from as low as around 1 Pct to a maximum of 20 Pct of the amount remitted. The most expensive are the services of global money transferring companies. 

Saturday, 15 February 2014 06:00
Published in Economy & Finance
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Neither be a lender nor a borrower, for money you lose both your friend [the borrower] and the money itself” has been one of the famous lines from William Shakespeare’s plays. That was many, many years ago. The game has changed now. Not only people, but countries, including the richest ones on earth, from the United States to Japan, from Australia to the UK, borrow a huge amount of money. They have even established institutions that specialize in lending money in massive amounts. Countries borrow money from these institutions and provide loans to one another. 

Wednesday, 15 January 2014 18:00
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