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Ethiopia offers india farmland, 40 percent the size of punjab

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Ethiopia has offered to Indian investors 1.8 million hectares of farmland, equalling nearly 40 percent the total area of principal grain-growing state of Punjab, in what could give a big push to the country`s food security.


“So far, we have transferred 307,000 hectares of land to foreign and domestic investors. Some 79 percent of this land has been transferred to Indian companies. This land is on 70-year lease,” said visiting Ethiopian Agriculture Minister Tefera Derbew.


“We are now proposing to transfer another 3.6 million hectares of land to investors from overseas. And I am confident that more than half of this 3.6 million hectares will go to Indians,” Derbew, who is here on a three-day official visit, told IANS in an interview.


The land offered by the East African nation, at the horn of the continent, equals 50 percent of the cultivable land of Punjab, often called India`s granary, accounting for 23 percent of its wheat and 10 percent of paddy output.


“How much land will actually go to Indian investors depends entirely on the interest of investors. If they come and take all the land, then also we will be very happy. Indian investors are very welcome in Ethiopia,” Derbew said.


According to the visiting minister, Indian investors have so far committed $4.7 billion investment in Ethiopia and most of it is related to the farm sector. He said the investment was going to rise sharply in the coming years with interests arising in mining as well.


Indian firms have interests in cotton, palm oil, rubber, oilseeds and horticulture.


Derbew said an Indian company was in the process of getting 100,000 hectares of land for sugarcane production. “India has expertise in sugar. We are in talks with several Indian companies to help develop the sugar industry in our country.”


Officials in New Delhi identified the company as Karuturi Global, one of the largest global players in the organised floriculture industry. The investments planned, they added, could go up to over $100 million for a sugarcane crushing and processing unit in Ethiopia.


The minister said the trade balance, which was hugely skewed towards India, would tilt in Ethiopia`s favour once the projects materialise. “Our bilateral trade is over $500 million. But most of it are Indian exports. Our exports are negligible.”


He said there was also scope for Ethiopia to export potassic fertiliser to India.


Derbew said his government had also liberalised the norms for allocation of land for all major infrastructure projects, including those for roadways and railways, and was in talks with several Indian companies in this regard.


“We target to build over 2,000 km of rail link in the next five years. Similarly, there is also a huge investment potential for road infrastructure,” said Derbew, adding: “We hope Indian companies will take advantage of this opportunity as well.”

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This is a phenom called "land Grabbers' and it's happening all over Africa. Wealthier nations or corporations in bed with corrupt African leaders "buying" land for commercial use It's causing social upheaval that will explode soon or later. The Government of Ethiopia relocated hundreds of thousands from their lands to "communes" to free up land for foreigners.


I think influx of poor peasants will not just be in Somaliland but in Puntland as well if not entire Somalia.

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The Zack   

They will mostly be using Djibouti's port but I won't be surprised if they use Berbera as well. The xabashis offered same kind of deal to Saudis and it hasn't worked out well yet.

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Like I said, these other countries are securing their countries food security. While millions of Ethiopians go hungry and still waiting for 3 meals a day promise in 1995. Agriculture development and fertile land should be under a country's national interest, it should be privatize until there is a surplus in food. When has a country ever solved it food shortage by selling land to outsiders

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Zack-It's not so much allowing them to use the Berbera, more has to do huge displacement of peasants who will be left with no source income and will become economic migrants in Somalia. Majority of Ethios are subsistence farmers and the land policy in Ethiopia is detriment to their livelihood.

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Chadha Agro Plc, one of India’s giant operators in agro business, is set to get hold of land twice the size of Addis Ababa to invest in what has already become a popular field for foreign investors and a priority area for the government of Ethiopia. The company has requested a 100,000 ha land to invest in sugar development project while the Ministry of Agriculture has provided it with 22,000 ha land in Guji Zone in Oromia Regional State, according to information gathered from the Oromia investment Commission. The company is set to receive the rest 78,000 ha land after its performance on 22,000 ha land availed is evaluated.


Chadha will be engaged in what is projected to become a massive sugar development investment venture on the 22,000 ha land involving a vast area of sugarcane plantation fields and a modern mill.


Registered last June with an investment capital of close to seven billion birr, the company is scheduled to establish a huge sugarcane farm and factory like the government’s Tindaho sugar development project in the making.


There are currently three state-owned sugar factories operating in the country: Metehara, Fincha and Wonji with an annual production of 120,000 tonnes, 100,000 tonnes and 70,000 tonnes respectively. Aside from the three factories, there are other three giant sugar projects in the pipeline: Al Habesha Mills, a Pakistani’s sugar development project set to commence production in a few months, Tindaho and Hiber Sugar, a share company established recently.


With the project covering the whole 100,000 ha land the company requested, Chadha’s investment plan submitted to the government indicates that it will provide permanent and temporary job opportunities for 35,000 people.


The company is scheduled to launch the project on the allotted 22,000 ha land while the government has given it the green light to receive the additional land for expansion projects.


The Ministry of Agriculture provided the company with the 22,000 ha land a few weeks ago while it will oversee the performance of the project to provide the company with the additional plot. (The Oromia Regional State is not mandated to provide land for investors by itself if the request is more than 5,000 ha.)


With the land grab issue in Ethiopia long becoming a bone of contention between policymakers and critics, Chadha will increase the number of companies which received, or are about to secure, vast lands up to 300,000 ha including Karuturi, another Indian firm globally know as world’s giant flower producer and Saudi Star Agricultural Development Plc, Al-Amoud’s recently established company.

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Unused land in Africa 'could feed the Gulf'

AMMAN, JORDAN // A handful of North African countries, along with Iraq and Sudan, could feed the Gulf - but only with substantial GCC investment, experts said yesterday.


Speakers at the Arab Food Industries and Franchising Forum in Jordan argued that if land in Sudan, Iraq, Libya, Algeria and Morocco were fully used it could support the rest of the region.


The area uses barely a tenth of its available arable land, according to George Nasrawi, who was representing Lebanese businesses. Instead, said Imad Abou Rafeh, the director of AR events, the conference organiser, countries are concentrating on quick returns from tourism and property. That, he said, was not sustainable.


More agriculture would mean more jobs, not only on farms but in processing, advertising and packaging, he added.


A report released last spring by the International Food Policy Reseach Institute, which researches food issues in the developing world, suggested that long-term food supplies could be best secured by arrangements that helped producer countries' economies to grow, raising incomes.


The unemployment rate in the Mena region is one of the highest in the world, especially among young people. The World Bank puts the global average youth unemployment rate at 14 per cent; in the Mena region it is 25 per cent. As much as a fifth of the Mena population lives on less than $2 a day.


Abdullah Sultan al Fa'an Shamsi, an adviser to the UAE Ministry of Economy, said political instability had led investors to overlook North Africa. He also called for tax breaks, deregulation and greater transparency. Countries in the Mena region generally have higher export tariffs on agricultural goods than in most of the developing world. This, experts say, needs to change.



"Arab countries need to have a unified position on agriculture," said Elias Assouad, chief executive of Temco Group, which specialises in food manufacturing and refrigeration. He called for customs barriers to be lifted.


The UAE has already made significant investments in Sudan, holding 2,800 square kilometres of farmland. Between them, GCC countries own 4,800 square kilometres of Sudanese farmland.


"The UAE has taken serious action towards aquiring land and starting its cultivation," said Mr al Fa'an Shamsi.


But companies at the forum remained optimistic. Abdulraouf Manna, the managing director of Savola group, a food manufacturer, said it planned to open agriculture enterprises in the region.


"We don't jump into businesses we don't understand, and so we'd like to find a partner in Sudan or North Africa," he said.


The process is difficult, though. The necessary regulations exist to guide investments, but are not always implemented.


The cost of oil - which accounts for up to half the cost of farming - is also rising again, currently heading towards $100 a barrel. That raises the price of fuel for transport and machinery, and many fertilisers are petroleum-based too.


Andew Barnett, an economist at the American University of Sharjah, said that even if the Gulf benefited from the increased oil revenue, it paid it back in the rising price of food.


"It doesn't matter if they buy farms in Africa or Asia, the cost of producing food will be higher," he said.

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Meles Eyes Regional Ports amidst Decentralised Projection of National Economy



Prime Minister Meles addresses the MPs at the Parliamentary session held Thursday, February 03, 2011. To his right sit Tewodros Adhanom, minister of Health, and Azeb Mesfin, first lady and MP.




Monday, February 07, 2011



Ethiopia will need more regional ports than exclusively depending on the Port of Doraleh because the national economy will not only grow but become decentralised over the coming years, Prime Minister Meles Zenawi told MPs last week.

Addressing MPs during his rather irregular question time, Meles said he saw the size of the national economy growing to a staggering number of one trillion Birr over the next five years, 60pc of which is projected to be covered with the national budget.


His statement on the morning of Thursday, February 3, 2011, was a reaffirmation of his administration’s determination to continue with fiscal and monetary expansionary policies under the GTP.


It is also an indication of a significant growth in exports and imports through the corridor of Ethio-Djibouti, which is currently handling over five million tonnes of inbound and outbound cargoes from Ethiopia.

“The Port in Djibouti will not be sufficient for the economic growth in Ethiopia,” Meles told Parliament, in response to a question from Ashebir W. Giorgis (MD), a lone, independent MP, on the prospect of Ethiopia’s use of the Port of Assab.


Ethiopia stopped using the port, the nearest one to Ethiopia, when war broke out with Eritrea, in 1998. Assab has remained idle since then, for Eritrea largely uses the Port of Massawa.


The regime of President Issayas Afeworki in Eritrea has an “agenda to create havoc in the region,” Meles said, making it unlikely for Ethiopia to turn to Assab for as long as the government in Asmara remains in power.


“There are other ports in Kenya and Somalia,” Meles said. “This is truer when the growth trajectory is decentralised from Addis Abeba.”


Meles sees regional ports in Berbera, and possibly Zeila, in Somaliland as well as Mombassa in Kenya to serve the southern and eastern parts of the country. He unveiled to Parliament his administration’s plan to start the building of a railway line to a new port under construction in northern Kenya with Chinese financing.


There is also a new plan by the Djiboutian government to build a port in Tadjourah, northern Djibouti, the successful completion of which Meles’s administration is keen to see.


“Ethiopia is cooperating with Djibouti on the new port of Tadjourah,” Meles told Parliament. “We are working on a railway line to this port.”


The Gulf of Tadjourah has historically been a significant outlet to the central part of Ethiopia, entirely handling the trade of Shewa and Aussa, according to historian Richard Pankhurst.


Emperor Menelik had used this outlet to import arms and merchandise from his base in Ankober, located 450km (aerial distance) from Tadjourah.


Meles believes the use of regional ports is not only justified by Ethiopia’s need to have more outlets to the sea, but also the risk of growing alone in a region of underdevelopment.


“We cannot introduce growth all by ourselves in the absence of growth in the region,” he told MPs, of whom 98pc are from his ruling EPRDF.


Of the 20 questions forwarded to him in his address of close to two hours, 14 were directed from EPRDFites and most were about inflation as well as the recent measures his administration took in capping prices on consumer goods. EPRDF MPs, such as Genet Abate, Fentaye Wendim, and Atsede Kebede, were all concerned about the viability of the price cap.


“Inflation is largely due to shortages of supply,” said Girma Seifu (MP-Forum), the only opposition voice in Parliament. “What is the government doing to address this shortage?”


The income of citizens has been depleted due to the devaluation of the Birr against a basket of major currencies, and there are severe constraints on the supply side, issues the administration has failed to address, Girma told the Amharic weekly, Negad Ras, last week.


Meles would agree, but partly. Greed among businesses to amass “unjustified profit margins” and structural deficiencies in the competitive nature of the economy had a part in exacerbating inflation, according to Meles. His administration will keep taking measures to control inflation and the increasing cost of living, he said.


Though the price cap has come under fierce criticism from businesses and macroeconomic experts, as Ethiopia follows a liberal economic policy, Meles argued the move was taken to strengthen the liberal but regulated market.


“There are those who are called market fundamentalists who are always against the involvement of the state in the market,” said Meles in response to Girma’s question about whether Ethiopia’s economic policy regime was still within the bounds of “free market.” “Yet, there is a time when they will do anything necessary, using both their teeth and nails, when their economies are on the verge of collapse. The question should not be whether or not the state intervenes, but to what a degree.”


Meles justified the recent intervention in the market as a task that had begun last year, following the legislation of bills on trade registration and consumer protection.


“We did not start it this year,” Meles told MPs. “Neither did we start enforcing it for the salary increment. However, we have started enforcing it earlier because of the salary increment. What we are doing is regulating the market before it becomes worse.”


Macroeconomic analysts are surprised by his remarks that his administration’s expansionary fiscal and monetary policies have “zero effect” on inflation.


“We were able to control inflation,” Meles said.


Yet, the month-to-month moving average of the consumer price index (CPI) for December 2010 registered over 14pc, showing that the administration is still not out of the woods.


Yet, the Prime Minister takes pride in keeping the budget deficit below the three per cent recommended for the Eurozone economy, despite an increase of 7.5 billion Br to the 77.2 billion Br federal budget Parliament ratified in 2010. Meles pledges to maintain a federal budget deficit of 1.5pc.


Macroeconomic pundits are sceptical for the budget deficit calculated without foreign loans and grants is way above the three per cent Meles often quotes.


The budget deficit, excluding 15.4 billion Br in grants and loans, is 6.5pc, as revealed in the letter of intent and memorandum of understanding (MoU) that was given to the IMF, in October 2010. It had been signed by Teklewold Atnafu, governor of the National Bank of Ethiopia (NBE), and Sufian Ahmed, minister of Finance and Economic Development (MoFED).


Source: Addis Fortune

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