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mE GUARDIAN. MondaJ June 13, 20U


Poor infrastructure, weak banking affect investments in Ethiopia

Good governance, key to African economic development, says AIDB 'T'HE Arrican Development I bnk (AIDS) uys promotion of good governilnce ~milins t"he key in me Oght against poverty in Africa. AfDS made the call in a publication on -Mrln n Governance Outlook- presented at the b.lnk's ongoIng annua l meeting In Usbon, Portugal. -Good ~overnance Is crucial for mclusive and s usLil ined economic g rowth; k sOIid. The pubIiGIt.ion, which was presented to a cross section of the organised prlvOite sector, sa id thOit enhOlnclng Africa's voice on govemOince was not negoflalile.

Presenting the new bOInk's flagship publication , Dr Kamal Elkeshen, AIDs Vice Presid ent (Seclor Operations), called for peri. odic .assessment of Arncan governance baselines, trends and prospects. In the publication, Dr Mthuli Nculx, AfDB Chief Economist a nd Vice President, said that the ImplementOillon of AGO initiative would be closely foi· 10wW by regionOiI member stat~, governments and different partnerships. "The~ ue Imporunt chal· l e n~es to Implement this Initiative," he said_ Dr Frannie l butler, exccu·

live secretary of Arrican Capacity Building Foundation (AC8F). said that then~ was need for assessment and validation processes to be based on ~liabledata.

Llautiersaid thuthe bane of veriOable assessments folthe dlmcultles lowed encountered In some countr1~ In collecting new data due to fngile admln\.str.!.dons. Another panelist. Me. I.sOIac lobe, director Governance, Economic and financial Refomu Department at the AID B, said that -AGO provides opportunities to mhlnk existing indiGlltor sas.-

'T'HE EU BUSiness Group has 1 identified poor infrastructure, weOlk bankin~ systern, difficu lty in bUSiness transaction a nd frequent change of investment laws as problems arrectlng fo reign investments In Ethiopia. Mr. Henrik Heruen of the EU Buslnus Group in Ethiopia made this known on Friday, at the fi rst EUEthiopia Business Forum orgOlnlsed by the EU Delegation and the embassies of the 19-EU Member States In Addis Abba.

Hensen, in a pre.sent'atlon titled " EU 8usinus In Ethiopia", also listed frequt!nt disruption of businesses, high tax, rising Inflation, lack of storage capaci· l)', Insurance credit cap as other factors that make doing business difficult. He SOlid a rece nt survey con· ducted on how fU investors operate in Ethiopia showed thOit only 12 per cent of the investors find it easy to do

buslnus In EthlopiOi. The survey ,lIsa revealed thOit S4 per cent wue operatIng In 01 difficult situation, wfiile Jl per cent were only [rylng to operate in Ethiopia. Mr. ChriStoph WOIgner of the EU Delegation to Eth lopiOi uid fertile land, minerai resources and growing pOpulallOn were some of the invest ment opportunities (hal EU Investors were interested to In vest In. Wagner said as one of the fast growing non-oll produclng country. Ethiopia has Investment opportunl. ties especially in OIgrlcu l· tu re, construction and inrnstrucru~ such as telecom, electricity OImo n~ others. He said Ethiopia s road network and electricil)' generation have doubled when compared with the sltua· [Ion In 1991. Mr. Ta d~sse Halle, Ethlopia-s Minister of State for Industry said EU has contributed to Ethiopia's devel-

opment through trade opponunitles for Ethiopia'S products to EU markets. Haile said EU's support 10 Ethlopia's development inclua~d energy, natura l resourcu development, trade upaclty, macroeconomic support, gender equality and capacity build· Ing.

H~ SOlid for Ethiopia to translate the support being provided to her, the counuy wa nts mo~ private sector Investment and development. Haile said he was optimistic that the trad~ forum \'o'Ould result Into a very fruitfu l Impact that would provide an enabling environment for more trade and invest· ment opportunities and cooperation between the EU Member States and Ethiopia. Mr. XOIvier MOirchal, the head of EU delegation to Ethiopia said the fOruni was organised to Identify and nnd solution to the problems affecting EU businesses In Ethiopia.

Climate change will affect water for fanning, warns FAO fl exible water allocations LIMATE change will have basins,"1t warned. According to the report, SJ$:tems will be a Rrst priori. ,lJs.nev" measure to assist Africa's economic growth C major Impacts on the temperatures ty,- the report said. availability of wate r for Increased growing food and crop pro. i.luClivity In the dccad~ to come, warns a new FAD report. almate change, water OInd food security constitute .. comprehens1...e s urvey of e:dsting scient inc knowledge on the antlclr,OIted consequences of d mate change for water use In agricultu re, the report releOised in Rome on Thursday slOited. It said the impacts would be by way of ~ductions In river runoff and aquifer recharges in the Mediterranean and the semi-a rid areas of the Americas, ,\u stralia and Southern Africa regions that ,ue OI lready waterstressed. In Asia, the FAD warned [bat luge areas of Irrigated land that ~ I y on snowmelt and mount.lHl glaciers for Waler wo uld OIlso be aITect· ed, while heavily popu lated river deltas were at risk from a combination of reduced water nows, incrused salinity, OInd risIng sea levels. • According to the report, an acceleration of the world's hyd rological cycle Is .. ntiei· pated as rising temperatures increOise the rate of evaporation from land and sea. -- Rainfall Villi increase In the tropics and higher latitudes, but decrease in already dry seml·arid to m id·a rld latitudes OInd In the interior of luge conti· nents. A greater r~quency in d roughts and noods will neet! toDe planned for but al ready, WOller sCOIrce a~as of the world are expected to become drier and houer. _. Even though estimates of groundwater recharge under climate change cannot be made with any certainty, the Increasing frequency of drought cannol be exptcted to encourage further development of available groundwater to burrer the ploduction risk for farmers. .• And the loss of glaciers which support around 40 per cent of the world's irrlJ!:ation will eventually Impact the amou nt of s urface IVater available for aJl.ricu l tu~ in key producmg

would len~then the growing season III nonhern temperate zones but would reduce the length al most everywhere else. The repon also looked at actions that could be: taken by national policy makers, regio nal i1nd local water~ shed aut horities, and individual fumers to respond to these newchallenges. One key area requiring attention, it said, was improving the ability of COUntries to implement effective systems for 'water accounti ng', the thorough meOisurement of wOlter supplies, tran sfers, and transactions In order to make inform decisions about how water resources cou ld be managed and used under increasi ng variability. . ' Water accounti ng In most developing countries Is very IImlred, and alloca· tlon procedures are non existent. ad hoc, or poorly developed. -- Helping d eveloping cou ntries acquire good water accounting practices and developing robust and

It advised that at the farm level, growers could change their cropping patterns 10 allow earlier or late r plantIng, redUcing their water use OInd optimising Irrjgatlon. It further said that yields and productivity could be Improved by shirting to $011 moisture conservillion practices, Including zeroand minimum tillage, while planting deep-rooted crops would allow ra rmers to better exploit avail able soil moisture. The report noted that ru too little was known about climate change how impacu on water for agricufture, and that this would play out at the regional and sub-regio nal level, OInd whe re farmers would be most at risk. . -Greater precision and focus is needed to understand the nature, scope and location of climate ch.1nge impacu on developing country wOlter rMOurces for agricu lture,H the reponsaid, adding:" Mappingvulnerability fs a key task at nation· OIl and regionallevels. R

:'J"HE United States (U.s!) ernments whkh wlU help to . i.ldeclared in lusaka on eltsUre ,that Africa's natural Friday that It has adopted wtaJth benefits the people of hew measUres to help AIrica Africa rather than corrupt to Oght corruption and om~ls. - - Another challenge is Impl'O'o'l'. on Its business envl· 'tonment for economic armed connins whlc:"h, in addition to iu tremendous growth. Secre:tary. of State, Hilary human terror, undermlnes Clinton. who brought the business environment by l Oth African Growth and maklng it mo~ expensive ppportun,% Art (AGOA) and more dangerous for Mlnistertil rum to a close groy.'lh and bea.use healthy in the Zamblan capital, said and productivr ~ple fonn 'theU.s. and African countrieS the foundation of any thriv· must partner to ensure that Ing economy, we'll continue to join the panners to light the new measure wmke<i. She said it was also th~ IIIV/Aids. red uce maternal responsibility of the partners monaUty. and end hunger to e.nsure tnat conntcts on and malnutrition. "This isa wide r.mglngagen'the African continent were brought to an end to pave da for strengthening the way "for economic growth business environment on the long run and all theseactlons and prosperity. " 1am clevatlng In the Slate . requi re commitments from Depa rtment, corrupUon, as a all ofus." The Secretary of Sene also ~Ior of our diplomatIc efforts and we are estab- lamented pollticallnstabili'l lishing an intervention fund tha t llad dimmed Africa s to (Rate and lxM;)stAml'.rican econoinlc~rowth. She said: only four African support for antl<OlTUption leaders hOlve OIccepted to efforts. " United States now relinqUish power and allow requires 011, gas and mining peaceful transltlon In the l;LSt comp.mles mat n lse capitalS in our market.r:o discuss roy- 40J.l:fl.~ affects trade and d ~lopment," a COrTesponalti~Uleypayto foreigng.,....

dent of the News mney of Nigtrio (NItNJ coverlng the meeting quotes her as saying. Clinton aLro told the fomm that political turmoil in 1\Inlsia, E&ypt lJbya. and other Afnan countries championed by the youdls of those countries ~ enough to tell the leaders that AfrIcan youths wt:re not only asking for mort democracy, but for ·· more economic opportu· · nities-. She said Africjln leaders must be up and doing and (Rate the environment con· duclve _. for tr.Ide to thrive; for corruption to end and for poverty to be a thing of the ~t on the condnent. These:, she said, ....'tft neasSOIry because --by2025, one In every fouryoung people in tht: \'o'OrJd will be living In sub-Sahara Africa. This has rar reaching Implication for AfrIca and Its people". AGOA is the hallmark of the U.s. trade partnership with Africa. In troduced by former PresldentBUI alnton 10 years o1g0, the Act allows Afr1can countries to export 6,500 dlffermt goods to the U.s., duty free.

Cap_e to Cairo trade bloc plans to forge market of half a billion consumers FRICAN leolders meetmis weekend to push for· A wa rd proposals to bring mone than half a billion consumers rrom capt: Town to Cairo Into a single free trade zone. Heads or state from the Southern African Development Community, the Common Muket for Eastern and Southern Africa, and the East African Community trade blocs will m eet on June 12 in ohannesburg, South AfrIca or only th~ir second meetIng after an initiol1 summi t In October 2008. South Africa, the continent's la rgest economy, is driving region al Integration as it seeks to create a larg~r market for coml?a· nies such as Shopnte Holdings ltd. \SHP), Arrica's biggest reta: It'r. Africa's economy has grown an


average of 5.1 per cent over the pas t decade according the International to Monetary Fund, fuellna: the expa nsion of a new middle class. Strong growth and -inten· sifytng global competition fo r Africa's resources OInd markets" make It -impe.rative that Sou th Africa accelerates efforts to promote regionOil integration 10 ensure that we trade on tenns at leOist as favorable as other competitors; Trade Minister Rob Davies said. Africa now has more fanlllies earni ng In excess of $20,000 a ~ar than India, according to a Mcf(jnsey & Co. Inc study published In June las t year. While there are at least eight overlapping African economic brocs, poorly malntaln ~d transport

routes and lengthy bordercrosslhgi have undermined Internal trade. GrandA~a .

The so-called Gr.nd Free Trade Area, which encom· passes 26 countries and S90 million people, \'o'Ould Initially Ix limited to the trade of goods, Davies said In a une 8 opinion piece pub!.shed in Johannesburg's Business Report newsp-aper. The growtfi of Africa s consumer market saw Wal·Man Stores Inc. (WMTI bid last reOir for a control ing stake In Massmart Holdings ltd. (MSMI' the continent's thlrd- aegest retallt:r. Eliminating trade tariffs mOlY aid O.s, comr,anles such as Wal·Man, wh ch a~ looking for opportunities on the continent, said Jose FemandeJ, u.s. assistant sectctary of stolte for economic. enugy and business


affairs. -It's be:nenclal,It juS( opens up the market, It Inc~ases the customerhase,lt makes it cheape r [0 tra:nsport products fro m one place to anot her; Fernandez said In a June 6 Interview In Johannesburg. "It's something we belfeve will help companies and cwtomers will have access to cheaper products.Shlftto Asla Africa's avrmas trade has shilkd from badiUOnal partners such as me Europea n Union and U.s. to mlerglng economie:s Indudlng South Ko~a, India o1nd China. which Is now the continent's largest trading partner, OIccording (0 a lune 6 ~port by the AfrIcan bew:lopment Banle, the Organiloltlon for Economic Cooperadon and Development, the United NOitlons Devdopmenr

Programme and the UN Economic Commission for


Tnde among African countries has been uymled 'by ~Iidcal Instabili~ a lack of diverslflcatJon In their economies and po!?r implementation of trade a~ menu, the rT:poltS.lld. The Wlt:ven ~ of regional intrgr.ltion In Afrk;t, In which customs unions artn't ful1y Implemented, Indicate tilOit It win take years for the planned trade zone to take effect, 'said Paul Kruge r, a trade analyst at the ltane l..1w Cen~ for Southern Africa based In Stellenbosch near capeTown. "W'e are golnl. to run Into a few problems. KnJgerSilld In an Interview. -If you want ro do dlis thing on a grcmdiose scale, how U~ you going to do that If)'O:u've never done itoll dt~sm~·