The Ethiopian Messenger 9

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The Ethiopian Messenger

ውድ አንባቢያን

Dear Readers,

የአውሮፓውያኑ የ2018 ለኢትዮጵያ በጎ ለውጦች እና መሻሻሎች የሚታዩበት ዓመት እንደሚሆን ይጠበቃል። በመጀመሪያ ደረጃ ዲሞክራሲ ስርዓቱን ለማጎልበት እ.ኢ.አ በ2017 መገባደጃ ጀምሮ ተግባራዊ መሆን የጀመረው ታሪካዊ ሪፎርም ጥልቀት ባለው ሁኔታ የሚቀጥል ይሆናል። ገዢው እና ተቃዋሚ ፓርቲዎች እያደረጉት ባለው ድርድር አገሪቱ አሁን የምትከተለውን የአብላጫ ድምፅ የምርጫ ስርአት ወደ ቅይጥ ትይዩ የምርጫ ስርዓት እንዲለወጥ መስማማታቸው የ2010 በኢትዮጵያ የዲሞክራሲ ስርዓት ሂደቱ አዲስ ተስፋ ፈንጥቋል።

2018 promises to be a year of constructive changes and improvements in Ethiopia. First of all, the democratisation process will continue to deepen with the implementation of the historical reforms adopted in late 2017. The 2010 Ethiopian New Year (September 2017) witnessed a breakthrough in the democratisation process of Ethiopia, as the ruling party and the opposition decided to adopt a mixed political system by adding a proportional representation system to the current majority rule system.

በአውሮፓውያኑ 2018 ኢትዮጵያ የኤሌክትሪክ ኃይል የማመንጨት አቅሟን ከፍ የምታደርግበት ዓመት እንደሚሆን ይጠበቃል። የታላቁ የኢትዮጵያ ህዳሴ ግድብ የመጀመሪያዎቹ ሁለት 375 ሜጋ ዋት ተርባይኖች ሀይል ማመንጨት ይጀምራሉ። ይህ እንዳለ ሆኖ በ2017 ዓ.ም የኤሌክትሪክ አገልግሎትን በሁሉም የኢትዮጵያ አከባቢዎችና ለሁሉም ኢትዮጵያውያን ለማዳረስ ብሄራዊ የኤሌክትሪክ አቅርቦት ፕሮግራም ይፋ ሆኗል። ሌላው ፅሁፍ በህዳር ወር 2010 መጨረሻ ላይ በአቢጃን የተካሄደውን 5ኛው የአፍሪካ ህብረትና አውሮፓ ህብረት የጋራ ስብሰባ ተስፋ ሰጪ ውጤቶችን ይዳስሳል። በኢኮኖሚው ዘርፍ በኢትዮጵያ ከፍተኛ ዕድገት በማሳየት ላይ ከሚገኙት የኢኮኖሚ ሴክተሮች አንዱ የሆነው የጨርቃጨርቅ ኢንዱስትሪ ጥንካሬዎችና ያሉበትን ተግዳሮቶች የሚያመላክት አጭር ዳሰሳ ቀርቧል። በመጨረሻም የደቡብ ኢትዮጵያ ፈርጥ በሆነው እና የታሪካዊ ቅርሶች ሀብት እና ከ40 በላይ ጎሳዎች ባለቤት ስለሆነው ኦሞ ስምጥ ሸለቆ የሚያስቃኝ ፅሁፍ ቀርቧል። በዚህ መፅሄት ከቀረቡት ፅሁፎች ብዙ ቁምነገሮችን እንደምታገኙ ተስፋ በማድረግ በመፅሄቱ ላይ ያላችሁን አስተያየት እንታደርሱንና በቀጣይ እንዲወጡ የምትፈልጓቸው ፅሁፎች ካሉ እንድትልኩልን እንጠይቃለን።

2018 will also see substantial developments in Ethiopia’s energy sector. The country is expected to considerably step up its electricity production capacity. The Grand Ethiopian Renaissance Dam (GERD) will start generating electricity as the first two 375 MW turbines will enter into service. In parallel, the National Electrification Program (NEP) will help the country’s objective to reach universal access by 2025. Our third article addresses the 5th AU-EU Summit that took place in Abidjan in late November and analyses the Summit’s mixed results and encouraging signs. On the economic level, we look at the textile sector, one of the most dynamic sectors of the country, and provide an overview of its strengths and challenges.

Finally, we invite you to travel to the Omo Valley, Ethiopia’s Southern jewel. The region possesses an exceptional archaeological wealth and is the home of more than 40 tribes and fan We hope you will enjoy this issue of The Ethiopian Messenger.

Please send us your feedback and contribution to our future issues!

Most sincerely,

መልካም ንባብ የአርትኦት ኮሚቴ

The Editorial Team

Content

Democratisation in Ethiopia: A new chapter in the making

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2018, a pivotal year for Ethiopia’s Energy Sector

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The 5th AU-EU Summit: a (small) step forward

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Ethiopia: the next hub for world apparel investment and sourcing

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Lower Valley of the Omo: Ethiopia’s Southern Jewel

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Quarterly magazine of the Embassy of Ethiopia in Brussels. Editor: Embassy of Ethiopia in Brussels, Avenue de Tervuren 64, 1040 Etterbeek, Belgium. info@ethiopianembassy.be +32 2 771 32 94.

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Political Affairs

Democratisation in Ethiopia: A new chapter in the making Following months of negotiation, the ruling party and the opposition made the historic decision last September to adopt a mixed type electoral system by adding proportional representation to the current simple majority system of the country. This initiative is expected to increase the voice of the opposition in the parliament.

The 2010 Ethiopian New Year (September 2017) witnessed a breakthrough in the democratisation process of Ethiopia, as the ruling party, the Ethiopian People’s Revolutionary Democratic Front (EPRDF), and several legal opposition parties made the significant decision to adopt a mixed type electoral system by adding proportional representation to the prevailing plurality electoral system of the country. This initiative aims at entertaining the voices of the opposition through their increased representation in the parliament and deepen the country’s democratisation process.

Following thorough discussions, the coalition party also decided early January to pardon or drop the charges of some political leaders currently facing prosecution for being suspected of committing a crime and those already sentenced by the court, in accordance with the relevant law of the country. In addition, “Maekelawi”, one of the detention centres of the country, will be closed and turned in to a museum.

Majority system It is to be recalled that the Ethiopian electoral system uses the simple majority vote (first-past-the-post system) to elect representatives to the Federal Parliament and regional councils. According to the First Past the Post electoral system, a candidate who gets the most votes in an election is regarded as the winner and stands duly elected as a member of parliament (MP).

In addition to its easy implementation, the FPTP system produces stability. It avoids fragmentation of legislatures because it can produce a decisive majority with little or no coalition government needed in any deliberation process.

From now on, both the majority and the opposition agreed to adopt a mixed electoral system combining a majority rule and a proportional representation system, which will be respectively applied to 80 and 20 percent seats in the Federal Parliament.

Even if the current electoral system (simple majority) is used in older democracies such as the United Kingdom and Canada, it has received sharp critiques when applied to

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Ethiopia. Critics argued that it is not suited for the overall political and socio-economic situation of the country, and that Ethiopia’s current level of democracy does not allow it to accommodate such a system. They further argue that in contexts where the government has historically been deeply involved in the overall affairs of the country, and where the existence of a vibrant multi-party system is very poor, recent, the simple majority system tends to exclude opposition voices.

As all systems, the majority election system has deficiencies, such as the exclusion of opposition voices that fall short of attaining the simple majority. However, the first-past-thepost system is not the sole responsible for the absence of opposition seats in the Parliament, as the number of seats of opposition parties in the Federal Parliament and regional councils also dwindled from election to election due to their sustainability and endurance problems.

The way ahead Following the address of President Mulatu Teshome to the two Houses of the Parliament in 2015, during which he

stressed the need to engage opposition parties and members of the civil society to quickly move forward in nurturing democracy, the ruling and opposition parties have engaged in an extensive dialogue. So far, they have identified 12 issues for negotiation. Out of these 12 issues, an agreement was reached on two important points: The electoralsystem and the requirements to establishing a political party.

As stated above, after extensive discussions and negotiations, the parties have agreed to change the existing electoral system of the country by combining the simple majority rule and the proportional systems. Based on this agreement, total seats in the federal parliament will also increase to 660 from the current 547 seats. This agreement entails the amendment of the arcicle 54 of the Ethiopian Constitution.

Requirements to establishing a political party. Previously, the minimum requirement to establish a political party was to have 1,500 members. Taking into account the total population of Ethiopia and in order to give weight to the establishment of political parties, minimum membership requirement was increased to 3000. In addition to that, newly established political parties are now required to open an office in at least 4 of the 9 regional administrations and to have a full-time employee(s) in their offices.

Historic Process To graps the importance of these successful negociations between ruling and legal opposition parties, it can be useful to take a step back and look at history. It is important to keep in mind that Ethiopia had known only known two types of regimes until the 1990s: the feudal system and a Marxist military junta. During the Feudal system, the Emperor and its subordinates exercised a monopoly over access to resources and decision-making. As the king was considered the “law”, rules and regulations were merely written to satisfy foreign allies, or to fulfil requirements put in place by international organizations such as the UN. Even if there

were exercises to send representatives (ENDERASE) from the periphery to the center, the prerequisite for appointed representatives was a total loyalty to the king, and hence, these representatives were not working in the interest of the people but to satisfy the Emperor. From 1974 to 1991, all political, economic and social powers where highly centralized under a military junta. Despite a few attempts to “allow” the formation of political parties, in practice, the system was not tolerant of opposition parties which could possibly challenge the military government. Officially, there was no opposition party legally registered and functioning in the country. Many of them where based in foreign lands.

It is up to the political parties, and notably oppositions parties, to use this golden opportunity to deal with issues of interest to the large public.

In a genuine attempt to reverse the heritage of repressive regimes and to install a democratic government, in 1991, the Ethiopian People’s Revolutionary Democratic Front invited all factions and previously established parties to participate in the making of the Ethiopian Constitution and were offered with positions in the EPRDF-led government.

Despite the efforts to create a vibrant multi-party system, due to various factors, this project did not materialize. In 2005, in an attempt to encourage opposition parties, the ruling party by providing considerable political space for the opposition, going as far as tolerating some of their wrongdoings.

The then CUD (Coalition for Unity and Democracy) or locally known as “Kinijit” which had managed to win the capital Addis Ababa and a noticeable number of seats in the Federal Parliament ultimately decided to boycott any participation to power, even though the ruling party had finalized all preparations to hand over the capital city to them. That historic mistake is regarded as a major setback to years of efforts to strengthen the multi-party system, that brought back the democratization process in Ethiopia back to square one.

Today, a new chapter is on the making. It is up to the political parties, and notably oppositions parties, to use this golden opportunity to deal with issues of interest to the large public.

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Energy

2018, a pivotal year for Ethiopia’s electricity sector Ethiopia is expected to considerably step up its electricity production capacity in 2018. The Grand Ethiopian Renaissance Dam (GERD) will start generating electricity as the first two 375 MW turbines will enter into service. In parallel, the National Electrification Program (NEP) will help the country’s objective to reach universal access by 2025.

Next year, Ethiopia is expected to considerably step up its electricity production capacity and achieve other stepping stones in its the energy sector. The Grand Ethiopian Renaissance Dam, a landmark project in Ethiopia’s endeavor to become a middle-income country by 2025, will start generating electricity as the first two 375 MW turbines will enter into service. In parallel, the National Electrification Program (NEP) was launched in order to increase the access of the population to the electrical network. Universal access should be reached by 2025 using both on-grid and off-grid solutions.

The Grand Ethiopian Renaissance Dam: starting operations Built on the Blue Nile in Ethiopia since 2011, the Grand Ethiopian Renaissance Dam (GERD) is expected to start generating hydroelectric power in 2018. Two of the sixteen turbines will be activated, with a generating power of 750 MW of electricity. Upon completion, the dam will be

Africa’s largest with an installed capacity of 6,450 MW − equivalent to four to six nuclear reactors −, and it will double Ethiopia’s total capacity, that is expected to reach an approximate 14,000 MW upon completion of ongoing projects including the Koysho dam that is currently being built. The construction site is currently the biggest in Africa, with 10,000 men and women working day and night to achieve this gigantic national effort. Once completed, the Grand Ethiopian Dam will be the largest dam on the continent: 1,780 meters long and 145 meters high. Built for an estimated cost of 4.7 billion USD thanks to entirely domestic funds, the dam has been considered to be a landmark project signaling Ethiopia’s Renaissance.

Since the GERD is being constructed on the Blue Nile, that has its source in Ethiopia and flows to Sudan and Egypt, Ethiopia took the initiative to establish international consultations with the other riparian countries. A major step was achieved on 23 March 2015 in Khartoum, when the leaders of Egypt, Ethiopia and Sudan signed a declaration of principle on Ethiopia’s Grand Renaissance dam project. “We could cooperate and accomplish great things or disagree and hurt each other… we have chosen to cooperate,” the Egyptian President El-Sisi stated at this occasion.

On his side, Ethiopia’s Prime Minister Hailemariam Desalegn stressed that the Renaissance Dam will not cause any significant harm to the Egyptian people: Egypt and the rest of the Nile Basin countries are one family, he said. Moreover, on 1st of June 2016, Egypt’s foreign affairs minister Sameh Shoukry noted that the Grand Ethiopian Renaissance Dam has become a reality and that it is “pointless to bury our heads in the sand by not acknowledging a tangible physical reality.” Two French consultancy firms – BRL and Artelia – were also selected to undertake studies on the possible impacts of the dam.

Regional agreement Egypt, Ethiopia and Sudan signed a cooperation deal in March 2015 to ensure a fair distribution of the dam resources

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In October 2017, Ethiopia facilitated a visit of the Ministers of Water Affairs of Ethiopia, Egypt, and Sudan to further boost the existing level of transparency and increase confidence among the

The Grand Ethiopian Renaissance Dam, whose construction started in 2011, will start generating power this year

three countries about the Dam. During the visit, the Minister of water, irrigation, and electricity of Ethiopia, Engineer Sileshi Bekele, presented to his counterparts the major positive impacts the megaproject will have in Ethiopia as well as in the countries of the region upon its completion. On the next day, a trilateral ministerial meeting took place during which the pending issues regarding the International Panel of Experts (IPoE) and two recommended studies were discussed. During the meeting, Water Ministers of Ethiopia, Egypt, and Sudan drafted a guideline that will guide the activities of the two consulting firms in charge of conducting the impact analysis.

The assertion that the Grand Ethiopian Renaissance Dam has no significant impact on downstream countries is based on scientific research.

The assertion that the Grand Ethiopian Renaissance Dam has no significant impact on downstream countries is based on scientific research. Several studies carried out by Ethiopia have shown that the dam will have no significant negative hydrologic simulation, socio-economic, and environmental impacts on downstream countries. The country has so far provided about 150 documents related to the hydrological simulation and other issues in dealing with other parties in

a transparent manner. Ethiopia has also taken into account the drought scenario in the water filling strategy, mean flow scenario, and high-water flows scenarios, which in turn minimize wastage of water and utilization throughout the year.

Downstream countries will benefit from the renewable energy to be generated from the dam, which will serve as a water bank for both countries in case of drought. Sudan annually pays 50 million USD to clear the sands in its reservoir and irrigation dams and the GERD will reduce the possible accumulation of silt in the reservoirs and irrigation dams of both countries.

Most importantly, the dam will have a paramount contribution towards eradicating poverty, maintaining economic growth and pushing for more regional integration.

With a hydropower potential of 45,000 MW largely untapped until today, Ethiopia has a real opportunity to transform its economy and accelerate the economic integration of the whole region thanks to cheap and abundant energy. The goal of the country is to reach a generating power of 17,000 MW by the end of the Growth and Transformation Plan in 2020.

Plants constructed to this end during the last ten years include Tekeze (300 MW, completed in 2009), Tana Belese (460 MW), Gilgel Gibe II (420 MW, completed in 2010), Gilgel Gibe III (1970 MW. Koysho Dam (2,200 MW) is currently under construction.

An expanding distribution network On 27 November, the government of Ethiopia launched the National Electrification Program (NEP) to reach universal access by 2025, using both on-grid and off-grid solutions. The goal of the NEP is to better cover the country’s population and also provide electricity to neighboring countries. Through

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Reppie Waste to Energy Project, Addis Ababa

the first phase of the program (2018-2022), 4.5 million new grid connections are anticipated. Launching the program, Prime Minister Hailemariam Desalegn said access to adequate, reliable and affordable electric service is a critical enabler to Ethiopia’s transformation into a middleincome country. The NEP will also enable the country to reach the corresponding UN Sustainable Development Goal target ahead of time by providing adequate, reliable and affordable electricity for all by 2030.

The program will be realized in collaboration with multilateral and bilateral financial institutions and development partners. About USD 1.5 billion of investment and technical assistance is expected to be covered by the government, multilateral and bilateral financial institutions and development partners as well as the private sector.

In this framework, the World Bank is ready to confirm its support to the government of Ethiopia to realize its ambitious national electrification program and could extend 375 million USD in credit for the program.

A strong commitment to green economy The progress of Ethiopia’s energy sector expected for the year 2018 will represent an important step for the country on its way to economic development. As a matter of fact, cheap and abundant energy is crucial for the well-being of Ethiopian citizens, the development of the economy, tourism and especially for the industrial sector. Combined with a large, cheap and trainable labor force, robust infrastructure, political stability and a strategic location, the growth of the energy sector will boost the attractiveness of the country.

Furthermore, these new electricity production facilities will enable Ethiopia to export cheap electricity to neighboring countries. This will have a positive effect on regional integration and development. The sustainable development lies at the very center of Ethiopia’s economic strategy. This

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commitment has been demonstrated through the clean energy generation projects, through investments in electric transportation infrastructure (railway), extensive rural environmental rehabilitation works, among others. Various awareness creation programs regarding desertification and environmental rehabilitation work such as reforestation and afforestation have in fact been taking place country-wide and have been taken as an example in many parts of the world. As a result, the country’s forest coverage has reached 15 percent, which was at an all-time low of less than 4 percent almost two decades ago. By concretely advancing towards the realization of a green economy, Ethiopia has enabled itself to play a leading role in international climate change negotiations. The country is currently engaged in a successful climate diplomacy so that the voice of developing countries is heard on this pressing issue on the international arena.

The innovative Reppie Waste-to-energy plant Another landmark project for Ethiopia’s green economy will be the launch of the Reppie waste-to-energy plant in Addis Ababa. Starting in 2018, Ethiopia’s first waste-to-energy plant will produce 185 gigawatt GWh per year and protect the environment by diverting huge amounts of waste while covering 30 percent of the capital city’s household’s electricity needs. The facility located alongside the 50-yearold Koshe dump site is one of the various energy projects being implemented in line with Ethiopia’s Climate Resilient Green Economy (CRGE) strategy that aims to limit the country’s carbon footprint to less than 2010 levels by 2030 as it becomes a middle-income nation. The plant has been built according to the highest environmental and technical standards and will bet the first of its kind on the African continent.

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Political Affairs

The 5th AU-EU Summit: a (small) step forward African leaders and their European counterparts met in Abidjan, Ivory Coast, to debate on how to solve some mutual problems ranging from youth unemployment and security to investment and migration. Coming at a time when migration is high on the political agenda, the Summit’s discussions were dominated by migration with one objective: reinforcing existing measures to curb the illegal immigration of young Africans to Europe.

Expectations were high in the run-up to the 5th AU-EU Summit, which took place from 29-30 November 2017 in Abidjan, Côte d’Ivoire. More than four tumultuous years after the previous Summit and with considerable challenges laying at both shores of the Mediterranean, AU and EU Member States alike hoped to take concrete commitments in the best interest of their respective populations. As the Cotonou Partnership Agreement, which governs relations between the EU and the ACP States, is about to expire, many stakeholders were also hoping for a complete rethinking of EU-Africa relations.

Promising signs and persisting limitations However, this historic summit that was supposed to be dedicated to youth, investment, development and strengthening security in African states ultimately turned into a meeting of Heads of State and government on the migratory emergency, and this longer-term perspective was overshadowed by short-term measures to curb migration, which dominated the discussions between both continents.

This Summit also demonstrated the growing importance of Africa-EU Summits for both continents. Participants of the summit included 83 heads of state from Europe and Africa, representatives of the institutions of the European Union and the African Union, as well as non-profit associations and undertakings. Whereas the second (2010) and third (2014) summits had been ignored or boycotted by some EU and AU Head of States, the 5th Summit saw a high turnout of key African and European leaders including Nigeria’s Muhammadu Buhari, South Africa’s Jacob Zuma, German Chancellor Angela Merkel, French President Emmanuel Macron, EU Commission President Jean-Claude Juncker, European Council President Donald Tusk and AU Commission President Moussa Faki Mahamat. U.N. Secretary-General António Guterres also give a statement during the opening ceremony. It was also the first time African and European leaders were holding their threeyearly Summit in sub-Saharan Africa.

While most of the older EU members were represented by their heads of state or government, nine Central and Eastern European countries also attended the Summit. However, they were mostly represented by Foreign ministers and

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State Secretaries, proving once again their lack of interest in the EU-Africa framework.

Migration front and centre Although the official theme of the summit was “investing in youth for a sustainable future”, the attention of the first Africa-EU meeting since the start of the migrant crisis quickly turned to migration and allegations of slavery in Libya. European and African leaders pledged to help youth find work and repatriate some 3,800 migrants stuck in a Libyan detention camp and the final Summit declaration and signed a separate declaration on the creation of a joint task force specifically focused on reversing the humanitarian emergency.

EU-AU commission and United Nations Secretary-General António Guterres agreed to create a joint EU-AU-U.N. task force in order to save and protect the lives of migrants and refugees along the routes and in particular inside Libya. AU Commission Chairperson Moussa Faki Mahamat and President of the European Commission Jean-Claude Juncker also agreed to accelerate the voluntary return of migrants to origin countries, resettle those in need and seek to disband of human trafficking networks.

Even though the decision to rescue migrants in Libya and the action plan announced in the Ivory Coast are welcome initiatives that should be implemented as soon as possible, many experts also say the root causes of migration must be simultaneously addressed. Several AU and EU member states representatives clearly attended the Summit with the aim of obtaining a strong and fast commitment from Africa to accept the return of economic migrants.

Need for long-term strategies Stakeholders missed a valuable opportunity for renewing and tightening the cooperation between the two continents.

Attendants failed to address the most dysfunctional aspects of the relationship, as no substantial decisions were taken on the future of ACP-EU relations and Africa-EU relations.

The most complicated negotiations still are still ahead of us and long-term initiatives have yet to be taken.

Even though both sides agreed that EU-Africa cooperation must be increased in education, employment and integration of youth, discussions failed to find common ground between European leaders, who wanted to see more progress on border security and AU states accepting people deported from the EU and African leaders who expect more legal pathways for people seeking short-term stays in Europe. The key topic of the Summit, “Investing in youth for a sustainable future” was a timely and major issue, in the light of demographic trends in Africa and the urgent need for jobs and measures to tackle growing insecurity and migration. Only a strategic long-term vision and initiatives such as the EU’s External Investment Plan (EIP) for Africa will enable us to fight effectively against the root causes of precarious migration and ensure a better future for African and European generations. Even though

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Europe is a key partner for Africa – currently contributing more than one-third of the overall foreign direct investment in the continent, with 32 billion euros invested in Africa

by EU companies in 2015 –, the Summit failed to launch of a structured dialogue with European and African private sector under a Sustainable Business for Africa platform.

There also seem to be little agreement over what the root causes of migration are, and that it is unclear what definition is being used to guide policy. The implementation of initiatives has been worryingly slow, as EU leaders had committed to “conduct a joint EU-Africa analysis of the root causes of irregular migration and forced displacement to improve the evidence base of public policies”, but this analysis has yet to materialize more than two years later.

The change of tone and power dynamics demonstrated during the Summit is a welcome development for Africa.

Hope for the future The change of tone and power dynamics demonstrated during the Summit is a welcome development for Africa, and the Africa-EU framework seems to be genuinely evolving towards a real partnership. Yet, this constructive attitude will have to transform into concrete actions. In a speech in September, the EU’s foreign affairs chief, Federica Mogherini, said that “the time when we had the illusion of managing migration flows only through border management is gone.”

European commissioner for migration, home affairs and citizenship, Dimitris Avramopoulos, said for its part that it was “essential” to “open real alternatives to taking perilous irregular journeys. Investing in more legal pathways, both for protection but also for study or work.”

Africa also has work to do. Rwanda President Paul Kagame Kagame, who is spearheading the AU reform process, described the AU reform as urgent and a necessity as the continent’s economic and security environment depends on the quality of its cooperation. In this view, the African Union institutional reform will create a self-sufficient Union and lead to more reliable external partnerships, including with the EU. To do so, AU Member States should strive to increase their ownership by implementing the Agenda 2063.

The years ahead of the 6th AU-EU Summit, that will take place in 2022 in the EU, will be key to see if this vision can actually turn into reality.

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Economy

Ethiopia: The Next Hub for World Apparel Investment and Sourcing In the last 5 to 6 years, Ethiopia’s textile and apparel industry has grown at an average of 51% and more than 65 international textile investment projects have been licensed for foreign investors. The decision of the Ethiopian Government to prioritize the sector and design incentives to attract investment in view of worldwide competition has played a big role in the development of the sector’s economic status.

Slow beginnings Ethiopia’s long history of textile production began in 1939 when Dire Dawa Textile Factory, the first modern garment and textile factory of the country, was established. Later, Addis Garment PLC (formerly known as Augusta) was established in 1958. From then to 1991, the growth of the sector was sluggish; in fact, by 1991 there were only 19 textile and garment factories in Ethiopia, all owned by the State due to the command economic policy of the country.

Following Ethiopia’s adoption of a free market economy in 1991, the number of textile and apparel manufacturing companies increased to over 90. However, despite the government’s efforts, few transformational changes were witnessed in the sector until 2010.

A booming sector Ethiopia’s textile and apparel industry has experienced major development over recent years, mainly driven by the country’s wide availability of raw materials, cheap labour,

low energy costs, and several bilateral trade agreements with the world’s biggest markets. Data shows that in the last 5 to 6 years, Ethiopia’s textile and apparel industry has grown at an average of 51%, and more than 65 international textile investment projects have been licensed for foreign investors during this period. This recent surge in Ethiopia’s textile and apparel production and export to the global markets shows that the country has the potential to become one of the leading textile and apparel hubs in Africa, capable of exporting the equivalent of 30 billion USD with a bold vision of transforming the nation into a compelling new apparel sourcing hub for brands, retailers and their supplier.

The sector has become a top priority for Ethiopia as part of its goal to become a middle-income country by 2025.

The key objective is to make the sector globally competitive and to bring the necessary structural transformation to the nation’s economy to export industrial outputs, create thousands of jobs, attract much-needed foreign currency and above all, contribute to poverty reduction.

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At present, the Ethiopian textiles and apparel industry consists of approximately 188 medium and large-scale factories, 112 of which are foreign-owned. The total industrial sector in the country equals about 17% of the country’s GDP, with textiles and leather dominating the exports.

Industrial parks, strong infrastructure and convenient logistics facilities Based on the Growth and Transformation Plan I and II, the government intends to construct 15 export-geared, stateof-the-art and eco-friendly industrial parks in different regional states’ main cities. Five are already operational and two will be inaugurated in the upcoming months.

In addition, one private indutrial park built by a Chinese company in the Eastern Industrial Zone is operational and seven more are under construction, among which one is dedicated to textiles and apparel. All parks have an international standard building with high infrastructure, safety facilities and low carbon footprint. They also boast a wide range of government facilities on site under the Ethiopian Investment Commission’s one-stop service from banking to visa and immigration facilities, import and export licenses, work permits and customs clearance, etc.

Among other things, the cluster of specialised operational state-run parks, the Hawassa, Mekele, Bole Lemi, Kombolcha parks and the Adama Industrial Parks are also dedicated to textile and apparel. The flagship eco-friendly Hawassa Industrial Park, which is dedicated to textile and apparel manufacturing industries, encompasses 1.4 million square meters, 410,00 square meters of factory spaces across 37 shades, making it Africa’s largest manufacturing park with 100% occupancy secured from the very beginning. The park is planned to generate 1 billion USD foreign currency per year and employs 60,000 workers at its fullest operational capacity.

These initiatives have already attracted several international investors. Among the firms currently setting up operations in the Hawassa Industrial Park are: PVH Corp, owner of the Calvin Klein and Tommy Hilfiger brands; Hong Kongbased dress shirt specialist TAL Apparel; Indian denim giant

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Arvind Ltd, Chinese fabric mill Wuxi Jinmao; Indonesian Busana Apparel Group in garments; Hong Kong garments company EPIC; British Hela Clothing Group, the Spanish Quadrant Apparel Group PLC and Best Corporations Indian Private Limited Textile Company.

Transport infrastructure is constantly improved: the newly built electric railway network that links Addis Ababa, the dry port city of Modjo, and Djibouti reduced cargo transit times from three days by road to 10-12 hours by train and rail corridors that will make up a 6000 kilometres network are underway to create a series of trade routes to neighbouring Kenya, South Sudan and Sudan are being built. In addition, Ethiopian Airlines, the largest and the fastest-growing airline in Africa, plays a key role in the logistics process.

Incentives of the sector The textile sector is open to foreign investors and Ethiopian Diaspora. The minimum capital required for a foreign investor is 200,000 USD per project, and if a foreign investor invests in partnership with a domestic investor, the minimum capital required is 150,000 USD per project. The land will be given on a lease basis and the lease payment differs on the location of the investment. However, the government encourages foreign investors to invest in the newly built textile and apparel specialized parks that are located along key economic corridors, connected to ports by electric-powered railway lines and roads with lucrative incentive packages.

In addition, the Government provided the following incentives to encourage investment in the sector: - Up to 10 years corporate exemption of income tax depending on sector engagement; - Up-to 6 years exemption depending on sector engagement; - Additio=nal 2-4 year exemption for industrial park enterprises with at least 80% export or input supply to exporters;

- Additional 2-year exemption for 60% exporters or input suppliers to exporters within or outside of industrial parks

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Desta PLC’s textile manufacturing facility located in Addis Ababa

- Additional 30% deduction for 3 consecutive years if the investment is in underdeveloped regions.

- Up to 5 years personal income tax exemption for expatriate employees of industrial park enterprises (tenants) following issuance of business license.

- 60-80 years of land lease right at promotional rate; with sublease right for industrial parks enterprises.

-Reliable electricity at global competitive rate government avails dedicated power substation for industrial parks.

Regarding customs duty - 100% exemption from the payment of customs duties and other taxes levied on imports is granted to all capital goods, such as plant, machinery and equipment and materials;

- Spare parts worth up to 15% of the total value imported of the imported investment capital goods, provided that the goods also exempt, from payment of customs duties;

- An investor granted with customs duty exemption will be allowed to import capital goods duty free indefinitely - An investor entitled to a duty-free privilege buys capital goods or construction materials from local manufacturing industries shall be refunded customs duty paid for raw materials or components used as inputs for the production of such goods; - Investment capital goods imported without the payment of customs duties and other taxes levied on imports may be transferred to another investor enjoying similar privileges.

Exemptions of Customs Tax and Duties on raw material through a set of incentive schemes: Duty drawback, Voucher, Bonded manufacturing warehouse and on site (factory) custom inspection of imported raw materials and exportable products.

A fast-growing export market When it comes to international exports, Ethiopia is now at one-third of the use of its capacity and one-tenth of potential export value. Given the forecasted growth of the population (which is expected to double to 180 million inhabitants in 2025-2030), the sector will need to grow rapidly and

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mature a lot faster than other developing nations. The Ethiopian government plan for the sector to reach maturity in the upcoming 5-10 years, which is three times faster than other emerging nations. In that sense, Ethiopia differs a lot from nations like Bangladesh, for instance, where the sector has come to blossom with an active intervention of government, making the local market much more attractive for Ethiopian textiles and apparel companies.

In recent years, the global market has become increasingly accessible to countries such as Ethiopia. New export opportunities were created through initiatives such as AGOA (the African Growth and Opportunity Act), COMESA (the Common Market of Eastern and Southern Africa) and the many bilateral trade agreements concluded with Western countries, including the Netherlands, Belgium and Luxembourg. Ethiopia is also part of the “Everything But Arms” program that has been set up to provide access to the EU market for Lesser Developed Beneficiary Countries, free of duty and without quota restrictions, for all export products except arms.

Textiles and apparel exports from Ethiopia have increased substantially over the last decade. Based on figures from the Ethiopian Revenue and Customs Authority, Ethiopia’s textile industry obtained about $89.34 million worth of exports in the 2015/2016 fiscal year. According to the Ethiopian Textile Development Institute, Ethiopia has currently five major public textile factories producing mostly workwear garments for the domestic market, while about 180 privately-owned local and international factories produce shirts, suits, work clothes and uniforms for national and foreign markets.

Verticalisation and social and environmental responsibility Verticalisation is another factor the government has considered in creating a fully vertical supply chain from the ground up. The full cycle of textile business opportunities is encouraged in Ethiopia and more than 50,000 hectares of cotton is under cultivation, while an additional 45,000 hectares of high-quality cotton is cultivated by small-scale farmers. The production of cotton is already well integrated

into the textile sector, with garment factories relying heavily on domestically-produced cotton.

Over 80 years of development, Ethiopia’s textile and apparel sector has turned into a fully integrated industry with a significant contribution to the nation’s GDP. Textile and apparel companies operating in Ethiopia are also obliged to meet the social and environmental requirements of their buyers which demand certifications based on their performance on the ground. The Industrial Parks Development Corporation makes sure that the parks are eco-friendly and that these facilities are in place in usage. The Ministry of Labor and Social Affairs also ensures that the textiles and apparel companies’ labor recruitment, benefits, occupational health and safety comply with the labor law of the land.

Besides, international institutions like Swedish apparel giant H&M, the International Labor Organisation (ILO) and the Swedish International Development Cooperation Agency (SIDA) have launched an industrial relations project aiming to improve the development of a socially sustainable textile and apparel industry in Ethiopia. They are also dedicated

to providing training and technology transfer in the sector, which all stand in favour of boosting Ethiopia’s textile and apparel industry.

Promising context and remaining challenges Over 80 years of development, Ethiopia’s textile and apparel industry has transformed from one of the country’s least developed sectors to today’s fully integrated industry and value chain with a significant contribution to the nation’s GDP. Meanwhile, the government of Ethiopia has also been taking actions to encourage investment in this sector and has created various incentives to support the industry and due to this many international apparel companies are making their preferred investment and sourcing destination to Ethiopia.

As we have seen, the major strengths of Ethiopia’s textiles and apparel sector are the very high commitment of the government in support of the sector, the availability of abundant labor at low cost, cheap electricity costs and goods and the many incentives put in place by the government (tax holidays, income tax holidays up to 2 years for expatriate technicians, integration possibilities with raw materials) as well as fast and convenient transportation infrastructure.

Existing challenges are related to the immaturity of the sector and its actors, such as the limited availability of raw materials and the inefficiency of digital processing in business.

Therefore, the Ethiopian Government highly encourages and welcomes the Ethiopian Diaspora and foreign investors and traders to source and invest in textile and apparel industry independently or in joint venture with preference in textile and apparel parks.

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Lower valley of the Omo river: Ethiopia’s Southern jewel Located in Southwest Ethiopia, the Lower Omo Valley is one of the most diverse areas in East Africa. Home to some of Africa’s most traditional tribes, the region was once inhabited by our earliest ancestors and is the place where the earliest known discovery of Homo Sapiens fossil fragments was found. This exceptional archaeological and cultural wealth led the area to be designated a UNESCO World Heritage Site in 1980. The spectacularly beautiful Omo Valley also boasts a diverse ecosystem ranging from arid lowlands to lush high-mountain areas, volcanic outcrops, and one of the few remaining ‘pristine’ riverine forests in semi-arid Africa which supports a wide variety of wildlife.

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Lower valley of the Omo river: Ethiopia’s Southern jewel Located in the south-western part of Ethiopia, the Omo Valley is undoubtedly one of the most unique places on earth and one of Ethiopia’s key touristic destinations.

Archeological Wealth Ethiopia possesses an exceptional archaeological wealth, exceptionally significant to the research of prehistoric human and its material culture. The site was designated a UNESCO World Heritage Site in 1980 for its renewed prehistoric discovery of fossils and exceptional present cultural activities. The Unesco also noted that the discoveries of ancient stone tools in an encampment offers evidence of the oldest known technical activities of prehistoric beings, thus making the property one of the most significant for mankind. All these awe-inspiring archeological findings contributed to give Ethiopia the title of “cradle of mankind”.

The entire Omo river basin is significant geologically and archaeologically: the age old sedimentary deposits in the Lower Omo Valley are world renowned for the discovery of many hominid fossils, that have been of fundamental importance in the study of human origins and evolution.

These fossils include the remains of Homo gracilis and Australopithicines estimated at some 2.5 million years old, as well as the earliest known bone fragments of Homo sapiens, dating from 195,000 years ago.

A mosaic of cultures In addition to its scientific significance, the tribes that live in the lower Omo Valley are believed to be among the most fascinating on the continent of Africa and around the world, as the lower valley of the Omo has been a crossroads for thousands of years as various cultures and ethnic groups migrated around the region. More than forty tribes reside in the area and the valley is home to about 200,000 people.

The authenticity and cultural diversity of the Mursi, Suri, Nyangatom Dizi and Me’en has attracted researchers on diversity. The place is also a home for Omotic-speakers of the south Omo and includes the Ari, Maale, Daasanach, and Hamar-Banna. In her article titled ”Why Is Ethiopia’s Omo Valley Region So Rich in Culture?” Albee Yeend (2017) observed the distinctive features of each tribe: the Karo’s decorate their bodies and hair with chalk paint to imitate the guinea fowl and paint multi-coloured facemasks; the Mursi, for their part, are quite simply one of the most fascinating tribes, as women wear huge clay lip-plates while men have stick fighting rituals. As for the Hamer tribe, the men practice the ‘Bull Jumping’ - a three day initiation rite held every spring - and the women are some of the most beautiful in East Africa; and let’s not forget the crocodilehunting Dassanech, the most southerly of the tribes who live in Omo Valley. The Bana, Tsamai, Konso, Erbore, Borana

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and Gabbra have their own equally exclusive and interesting customs .

The traditions of the Omo Valley tribes are deeply embedded, and each tribe’s identity is vividly clear, even to outsiders. Researchers have noted that this extraordinary wealth of traditional human cultures and small tribal groups exhibiting an amazing wealth of body decoration and adornment was due to their long isolation. Most travel advice websites, such as Lonely Planet, strongly recommend visitors to experience the fascinating culture of the ethnic groups settled in the Omo Valley by visiting traditional Daasanach villages, watching Hamer people performing a Jumping of the Bulls ceremony or seeing the Mursi’s mindblowing lip plates.

Spectacular landscapes Besides cultural attractions, the Lower Omo Valley is endowed with astonishing flora and fauna. It is a spectacularly beautiful area with diverse ecosystems including grasslands, volcanic outcrops, and one of the few remaining ‘pristine’ riverine forests in semi-arid Africa which supports a wide variety of wildlife.

The Mago National Park intersects the park and flows into the Omo River covered by dense acacia woodland. The Park is actually the home for over 100 types of wild animals of which are the buffalo and elephant, lesser kudu and a few other antelopes, leopard, jackals, cheetahs and lions, olive baboons and velvet monkeys roam within the park’s boundaries. The area is highly favorable for birdwatchers as it inhabits 300 species of birds like the Egyptian plover; Pel’s fishing owl, the black-rumped waxbill and the dusky babbler. The area also includes other national Parks of Ethiopia such as the Omo National Park and Chelbi Wildlife Reserve. The valley is also the home of the the Adenium obesum or the Desert Rose, a wonderful dark and light pink little trees whose trunk looks like a very small Baobab tree.

As the area is more accessible than it was a decade ago due to new road networks and the development of telecommunication networks and sustainable tourism tours, Omo Valley is increasingly a must see destinations for all the lovers of scientific research, nature and culture. If you visit the area on your way from Arba Minch to Keyafer to Jinka market in the afternoon, you might have the chance to witness the wedding ceremony of a Hamer couple, or an incredible bull jumping ceremony. If you manage to visit this place, its fond memories shall remain with you forever.

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