Ethiopia Inside Out

Ethiopian economy’s new gold rush

2011-02-25T04:34:00.000-08:00

FRIDAY 25 FEBRUARY 2011 / BY DESALEGN SISAY

Gold is now Ethiopia’s second largest export item as well as the country’s second foreign exchange earner, after coffee.

The horn of Africa country’s half year export earnings since the start of its fiscal year in mid July, 2010, hit US$ 1.14 billion, according to a report released by the Ethiopian Trade Ministry.

Ethiopia’s agriculture based economy employs over 80 per cent of its estimated population of 80 million. Coffee, the country’s main export crop, which provided the country with an estimated 65 per cent of its foreign exchange earnings in the 1990s, is now down to about 35 per cent due to continues price slumps on the international market.

The country has tried to diversify its coffee dominated agricultural sector by encouraging the export of oil seeds, live animals, hides and skins and khat, a mild narcotic. Very recently flower was listed as one of the country’s main foreign currency generating export items.

Gold rush

The Trade Ministry’s report shows that gold is now the country’s second foreign currency earner securing US$ 179.2 million of the total export revenue generated within the six month period.

Coffee, the country’s main foreign currency earner, maintained its leading position with US$ 320 million, the report revealed.

According to this year’s 6-month export performance data, obtained from the of Ministry of Trade, oil seeds, which was the second largest export item last year in terms of foreign exchange earnings, lost its place to gold and is now listed as Ethiopia’s 4th foreign exchange earner.

The country earned US$ 76.6 million from the export of live animals (in 5th place), followed by flower exports with US$ 76.5 million.

The rise in gold export earnings, in the last two years alone, shows a dramatic change for Ethiopia’s agriculture based economy. The precious metal generated US$ 300 million in the 2009/10 fiscal year, almost tripling the US$ 105 million earned in the 2008/09 fiscal year.

Ethiopia’s mining sector has recently been attracting foreign mining companies. And Monday, the London-listed gold exploration firm, Stratex International Plc announced its plan to start mining gold and silver in the northern part of Ethiopia.

Stratex said in a statement that it had acquired 75 per cent of the AbiAdi project in northern Ethiopia which has a significant corridor of high-grade gold-silver deposits.

What I Admired About Ethiopians

2011-02-15T23:17:00.000-08:00

Philip N. Wesseh (PNW

Recently I was part of President Ellen Johnson-Sirleaf's delegation to the 16th Summit of Heads of State of Africa of the African Union (AU) in Addis Ababa, Ethiopia. The well organized Summit was held under the theme: “Towards Greater Unity And Integration Through Shared Values.” First, let me say that this piece is not about the happenings at the Summit as the major issues have already been reported in the media. This is a piece as the headline unambiguously suggests to say what I admired by the people of that country during the four day's stay in that historic country. I decided to take on this piece because of the long standing relationship between that country and Liberia, a situation that led to its former Emperor Haile Selassie, donating a land, on which the Liberian Embassy was built. This took place during the regime of the nation's longest serving leader thus far, the late William V.S. Tubman. Both countries enjoyed two things those days. The first was that they were never colonized and the second was that both leaders and countries played a great role in the formation of the former Organization of African Unity (OAU), which initial meeting was held in Sanniquellie, Nimba County in the 1960's.

Ethiopia is the oldest independent country in Sub Saharan Africa. The earliest evidence of Ethiopian history was in around 1000BC when the Queen of Sheba visited King Solomon. The first recorded kingdom in Ethiopia grew around Axum during the 3rd century BC. Axum was an offshoot of the Semitic Sabeam kingdoms of southern Arabia and it became the greatest ivory market in the north east. Ethiopia, now with a population of more than 80 million, is considered as a place where human existence began and the seat of ancient kings. Ethiopian tradition says that Ethiopia's first Emperor, Menelik I was the son of the Biblical Queen of Sheba and Isreal's King Solomon.

Even though the headline speaks of the country, actually this article mainly focuses on experience in its capital city, Addis Ababa, usually referred to for short as “Addis.” Upon arriving in the capital city which is three hours ahead of Liberian time, we were welcomed by the windy weather. This was followed by the unusual red carpet welcome of a Head of State visit. Thereafter, we accompanied President Sirleaf to the Sheraton Hotel, where the President was lodged, while some of us, members of her delegation were taken to our arranged places to lodge. The next morning while I was waiting to be picked up for the prelude to the Summit, I decided to perambulate in parts of the city to observe things for myself.

My Admiration

My first admiration about the people of that country was the quietude of the city and the respect for traffic rules. I noticed in the city how the drivers adhere to traffic regulations. This impression was seen when our chauffeur, while leaving from the meeting, attempted to by-pass the traffic. He was immediately stopped. But we got through because of the AU Summit pass. Thereafter, the chauffeur said, “It is because of this pass, I am free; or else, I could have been sent to jail.”All of us laughed and advised him to be careful as we were not in a hurry because we were returning to our lodging place. The few days I spent in Addis, I did not see a police officer and driver fussing or arguing as is commonplace in Liberia. There is high respect for police officers, especially the ones I saw in the traffic. Perhaps, we need to find out why it is like that in that country and not here. Whether this is owing to the professional attitude of the police and strict enforcement of traffic regulations in that country, is something we need to find out. Don't ask me which one.

The next was the level of honesty on the part of a marketer I transacted with. As usual in a foreign country, one has to interact on the local market by suing local currency. And so when we arrived, I exchanged some US Dollars to the current of that country, known as Birr. After that, I decided to purchase some goods at a nearby shop and I spotted a young man behind the counter. I asked for some goods and later he gave me my final bill. Because I had not done enough study of the different denominations, I gave him some local money in different denominations, from which he took the amount, which I took note of immediately.

Still not convinced that I was fairly treated, I decided to check, at which time, I found out that he did not cheat me. When I approached an official at the old-fashioned Liberian Embassy, which condition, President Sirleaf described as “terrible,” the person told me that these people are honest. He gave his experience of how he purchased some goods at a place. But mistakenly the dealer did not give him the correct change. “I did not take note of that, but when I went there to buy after few days, the dealer told me that the change I received was not correct; as a result he gave the remaining change to my amazement,” the embassy official said.

My next admiration is that unlike Liberia, the Ethiopians, mostly fair in complexion have a national dress code with national dishes. What impressed me most about their national dishes is that they do so proudly with their hands, mostly in groups. This was commonly seen when we arrived at the airport to take off for Ghana, en route to Liberia on Monday, January 31.

Another admiration I left Addis with was the level of construction taking place in that city. Unlike in Liberia, where bulk of the land belongs to private individuals, to an extent that government must use from Eminent Domain to buy land for public use, the land belongs to the state. Besides, there seems to be restrictions or something referred to here as “zoning laws” for construction. Even though such regulations exist in Liberia, it is just “on the book” as government has not been able to enforce it, resulting to land owners or purchasers constructing all kinds of makeshift structures in the city. New structures are being constructed. The most visible one is the new AU headquarters being built by the Chinese.

The future AU Conference Centre includes a 23-storey building that can accommodate more than 500 offices, a 2,000-seat auditorium, a 500-seat conference room and offices for the AU Commission staff. A five star hotel will also be built nearby the conference centre to accommodate the Heads of state and government and other guests for the yearly meetings. The building has been described as “China's gifts to modern-day Africa… and a symbol of Beijing's commitment to African development.”

Fortunately for Liberia, China intends to do similar project in Liberia by building an administrative structure to house many government ministries and agencies. But the issue of land has been a problem as the area spotted is being heavily resisted by the land owners. But President Sirleaf who was asked on the matter promised to negotiate to make the project a reality as it will be in the interest of all. She said although the government could use eminent domain, it prefers negotiation and consultation with the land owners.

While in the city, one of the things I wished to see was how the students dress while going to school. Because we arrived over the weekend, I was about to see this on Monday, hours before our departure. Those who I saw that morning dressed really as students. This is not here where some of our students do “sacking,” meaning their trousers and skirts hang on their buttocks.

As I conclude, let me say that Ethiopia is not endowed with enormous resources like Liberia, but it has coffee and a strong tourism program as I gathered. Besides, it has a rich culture and 280 species of wildlife. Liberia has similar species of wildlife, but the lack of a proper tourism Liberia has not been able to realize its tourism potential which is income generating. Even though there is an agency for this, it is only a living-dead agency. Today the Providence Island (where the freed slaves settled in the 1800's) a good tourism site, remains abandoned.

Indeed, even though this country is the oldest independent state and that it and Ethiopia were never colonized, we need to learn a lot from the Ethiopians. This has nothing to do with the age of Methuselah, but the Wisdom of Solomon. Simply, this means that it is not how old you are, but what you have been able to achieve with the time of existence.

Today, this country cannot boast of a national dress, national dish, just to name a few. Even though such issues have been raised at many conferences and public speeches, nothing has been achieved in this direction. The Ethiopians may have made these strives because of what is referred to as “The Vision of Ethiopia.” which reads:” “To see Ethiopia become a nation where through popular participation and consent of its people, democracy and good governance reign, social justice prevails, and where being emancipated from poverty, the country enjoys a middle income status.”

Ethiopia Launches 6,000-Megawatt Hydropower 'Project X'

2011-02-10T07:34:00.000-08:00

Written by Industrial Info Resources

Researched by Industrial Info Resources (Sugar Land, Texas)

Ethiopia's ambitious intentions to exploit the country's hydropower potential and make it east Africa's leader in renewable power for the next five years have taken a major step forward. The Ethiopian Electric Power Corporation (EEPCo) (Addis Ababa, Ethiopia) is moving on the construction of a 6,000-MW hydropower scheme, which has been dubbed "Project X" in government circles. Project X will be the foundation of a three-dam project to be launched in 2011 and is part of a plan to build generation capacity to 10,000 MW.

Salini Costrutori (Rome, Italy) is reported to have been awarded the hydro installation construction contract for the project. The company already has been active in Ethiopia with the construction of the 420-MW Gilgel 11 and 460-MW Tana Belesa hydropower projects. These two plants provide 47% of the country's present power generation capacity. Salini has a global annual turnover of $1.6 billion and planned works totaling $11.1 billion.

Salini already has moved heavy construction machinery to the site and is building personnel camps and site service installations. The site for the project is on the Abay River, which is 40 kilometers from the Sudanese border, in Benishangulk state.

EEPCo's project managers on the previous two projects will fulfill the same function of managing the civil and electro-mechanical engineering works on Project X, which could be renamed the "Millennium Project." They will establish a project office for project contracts. Contracts for the electro-mechanical section could be given to a Chinese company, which would open the door for the Ethiopian government to raise funds from the Chinese government for the project. The hydro plant is currently scheduled for completion in 2016.

EEPCo is trying to raise its power generation capacity to 8,000 MW when all three of the new projects are commissioned. The company plans a 255% increase in generation capacity; a 155% increase in transmission capacity to an 8,495-kilometer grid; and an increase in total transmission and distribution lines, from 25,000 kilometers to 126,038 kilometers. This will enable it to give power access to 5,163 towns and villages and increase the number of customers from 953,007 to 1.9 million. If the current expansion plans for hydro and wind projects are completed, it will allow EEPCo to keep pace with the growth in local demand and industrial expansion, and to export surplus power to the region.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.

Ethiopia's biggest hydropower plant resumes operation after 11 months

2010-12-29T00:30:00.000-08:00

NEWS - AFRICA NEWS

Addis Ababa, Ethiopia - Ethiopia's biggest hydropower plant, without a dam, Gilgel Gibe II (GII), has resumed operation after 11 months since it collapsed in January 2010, state media reported. The state Ethiopian Electric Power Corporation (EEPCo) had closed GII due to collapse in its main tunnel weeks after it was officially inaugurated at the beginning of the year.

Energy authorities and the country’s Prime Minister Meles Zenawi had then said that maintenance was to be completed in two months but the costly work in the tunnel took almost the entire year, leading to unannounced power shedding for months.

Geological incidents had caused a major slit in the concrete lining 9kms deep in the over 25kms long tunnel on 22 January, almost a week after inauguration and EEPCo closed the plant 25 January.

GII uses water from another dam constructed more than 26kms away for an existing power plant called GI. After it generates 180Mw at the older station, the water is channeled through 25.8kms long, 6.3m diameter concrete tunnel bowered through chains of mountains to generate 420Mw at GII.

Supported by a steep elevation, two 1,000m long metal penstocks at GII pour the water from the tunnel in the mid-height of a mountain down to the turbines at the bottom, increasing the turbine circulation and allowing the generation of more power.

Located 250kms south-west of Addis Ababa, GII was constructed by the Italian compant, Salini Costractori SpA, at a cost of 281 million euros (US$ 407 million) financing from Italy.

It was opened by Zenawi and Italian Foreign Minister Franco Frattini, on 13 January.

It was one of the three major hydropower plants Ethiopia inaugurated in the ending year.

Following a power crisis that led to a regular power shedding schedule for almost a decade now, the country has embarked on the construction of more than five ambitious power plants.

While the power shedding got so intense over the past three years, the prospect of ending the crisis with the commissioning of the new plant, like GII grew higher.

Nevertheless, the collapse of GII had made it clear the power crisis was not to end any time soon.

Ethiopia’s landscape and its river basins are said to have given the country a potential to generate over 46,000Mw hydropower but its current electricity generation capacity is 2,000MW, more than double from 2006.

The second most populous nation in sub-Saharan Africa has also signed agreements with Sudan, Kenya and Djibouti to sell power.

Pana 29 december 2010

Ethiopian Christ icon found 500 years on

2010-12-23T22:13:00.000-08:00

An 15th century Ethiopian icon of the infant Christ child sitting on his mother's knee was discovered after it was cleaned by a British charity.

A 15th century Ethiopian icon of the infant Christ child sitting on his mother's knee can be revealed after it was cleaned by a British charity Photo: BNPS

The central panel of the triptych had over the centuries become blackened with the sprinkling of perfume that the monks use as they worship.

The hugely important and stunning painted wood panel is now visible in its original coloured glory, showing a pale-faced Jesus with black curly hair and rosy cheeks.

His hand has three digits raised and two down as if blessing the person looking at him.

He has a halo and is wearing a gown and is perched on his mother's knee and she too has a halo.

The monks at the Monastery of St Stephen on an island in Lake Hayq in the north of the African country believe the icon, known as The One Who Listens, to be miraculous.

The artist had great skill, which is particularly obvious in the detail of Mary's robes.

In the central panel are three other figures, two archangels, Michael and Gabriel, armed with swords ready to protect the saviour and the third, St Stephen, after whom the monastery is named.

The side panels have 12 figures upon them all looking inwards towards the central picture.

They include Abuna TeklelyesusMoa, who sponsored the work, various saints including St Peter and St Paul, and abbots from the monastery.

It is one of the most celebrated icons in Ethiopia and is now housed in a special museum with other ancient relics.

The British charity The Ethiopian Heritage Fund sent experts to preserve the painting that had previously been covered with varnish.

Blair Priday from the charity, said: "This icon is one of the most celebrated in Ethiopia and because of its veneration, over time, the central panel had become blackened and was later painted over with thick layers of varnish as protection.

"The faces of the mother and child were barely visible.

"The varnish was carefully removed so it regained the original luminosity.

"The icon's repair was undertaken by Laurie Morocco, a foremost icon restore, who camped in the monastery's grounds while he did the work.

"In the mid 15th century a new technique of painting on wood with an undercoating of Gesso was introduced resulting in a much more luminous effect.

"When the varnish was removed by Laurie, one of the glories of Ethiopian art was visible once more.

"St Stephen's was a very important monastery and seat of learning, and although it was raided and lost some of its relics, many remained including a beautiful cross, manuscripts and this icon.

"This ancient seat of learning now has a museum where these incredible treasures are displayed in a small museum within the monastery

"We could not have carried out the work without the support of the Bureau of Culture and the Holy Synod of the Ethiopian Church and our expert advisor Jacques Mercier."

Christianity was adopted by the Ethiopians in the fourth century when King Ezra, ruler of the Axumite kingdom, was converted.

The country boasts one of the world's oldest illustrated Christian manuscripts - the Garima Gospels - which the charity has also conserved.

The charity has also been working on the rock churches of Tigray in the highlands of north east Ethiopia.

These are built high in the sandstone cliffs that dominate the landscape.

The churches are carved out of the rock and contain many beautiful paintings of Christian saints many of which are indigenous to Ethiopia.

In a church in Bahera, the saints on the church pillars had been splashed with lime wash which has now been cleaned off.

The frescos that cover the walls of Debta Tsion are currently being conserved.

Ethiopia on Track to Become Africa’s Energy Superpower

2010-12-22T23:43:00.000-08:00

Original story from : Abegaz at - http://seekingalpha.com/user/325016/instablog

This is a growth story. Within it are the flickers of hope and prosperity for what is ostensibly the poorest country on Earth. And so it is also a Christmas card to those investors who follow emerging markets and to those who keep their minds open to developing opportunities.

In the bustling streets, coffee shops and clubs of Addis Ababa, Ethiopia, a palpable change in sentiment is in the air. The country is experiencing a growth renaissance, employment is on the rise and there is an evolving sense of optimism. And it all centers on water, Ethiopian dam construction projects and future food security. The good news in Ethiopia can be summed up in just the following few words. Clean energy, industrial development, irrigation and plenty of cold hard cash. In other words, the Chinese have arrived.

And they want what Ethiopia can offer them. Power, and lots of it.

Now I will bet that the very last word that popped into your head when you first read the word Ethiopia at the start of this article was “power”. You would not be alone. This is the land of famine after all. The devastated country of 85 million people where failed crops have cost several million lives over the past decades, where an absence of irrigation, fertilizer and modern farm practices have been a curse that have stunted that countries development for as long as any of us have ever known.

But in an ironic twist, Ethiopia sits atop huge deposits of potash, has made discoveries of natural gas and is now in the early stages of building its own fertilizer facilities. Not only that, Ethiopia is amongst the wettest of countries in Africa. Now, everyone knows that the Nile River is the longest in the world but did you know almost 85% of its flow originates in the Ethiopian highlands? One of the key steps in preventing future failed crops will be to start getting some of that surplus water to where it is needed most badly. But that will require pipe, steelmaking, cement production and plenty of money.

Oh, did I mention the Chinese, the dam projects and all that cash yet?

And so, this is what is electrifying Ethiopia and is a harbinger of the end to its dependence on charcoal and kerosene as cooking fuels, an end to its dependence on foreign food aid supports and the beginnings of a very surprising growth story. There is hope now that the deep red soils will not continue to be washed away each rainy season as agricultural practices are improved, electrification supplants deforestation for fuel and tree planting has a real hope of taking hold on lands where only the most meagre of crops were being planted in the past.

And with the advent of power comes fresh investment out of Asia leading to the development of new industries and thousands of new jobs. A better marriage could not have been made by the angels in heaven themselves. Voracious needs, particularly in China, have come face to face with Ethiopia’s tremendous hydroelectric potential, low wages and resource wealth.

These developments have also lead to some of the world’s highest inflation rates too though. This story is not all sunshine and roses people. Like many other poor countries the cost of living is incredibly low. Wages may be rising but there has been a concurrent rise in costs keeping many in the rural areas impoverished. For some, life has only become more of a struggle. The Ethiopian Central Bank, in a surprise announcement last month, devalued the currency by 16.7% in a single day. That was the fourth devaluation in less than two years.

That revaluation was brought in as a means for the country to retain a competitive export advantage and as a means to manage its currency which floats against the US dollar. The falling dollar in effect precipitated the action by the Ethiopian Central Bank. There is no stealth devaluation there at all. The authorities have acted decisively as the country has never been in a good position to compete with heavily subsidized agricultural products of Western nations.

Compounding worries there is the recent commodity boom and the sharp price increases in cotton, coffee, cocoa, wheat, canola and of course cooking fuel (kerosene) amongst others. The problem Ethiopians face is that commodities, while locally sourced, are not locally priced as they are subject to global competition and speculative forces and those prices as we know are set in the futures markets.

So despite being an agricultural country and net food exporter, Ethiopians are facing the same market dynamics and price hikes that we are about to experience in the West (this story is indirectly about us too, so pay attention). And because their country is primarily an agricultural exporter, the new prices hit the streets almost as fast as they change on the boards in New York and London. Ethiopia with its economy heavily biased to agricultural goods is perhaps being hit the hardest as much of the resource boom to date has impacted the so-called soft commodities, primarily food. It is no joke that Ethiopians are now unable to afford buying some of the produce of their own country. Following this last price spike, coffee is almost out of the question for many.

Since the summer, the cost of a kilo of Coffee has climbed from about 2.20 US to over four dollars, almost a 100% price spike. Affording coffee on an income averaging a dollar daily is not just prohibitive; it is a sacrifice and a luxury. This irony is not lost on the people living right in the midst of the country where coffee was originally discovered and where it is still one of the primary exports abroad.

So Ethiopians have been pretty worried lately. They are stoic though and rarely complain despite the fact that the price of flour is also up over 70%, cooking oil by 50% and onions of all things have increased by an incredible 250% on the heels of a crop failure. And you thought we had inflation worries coming down the pike over here! Ethiopia’s Central Statistical Agency (CSA) meanwhile reports for 2010 that tobacco has risen 34%, clothing 25% and rent, fuel and power have collectively risen by over 16%. Yikes!

All of this of course is on outgrowth of shifting investment dynamics taking place worldwide at this time, where paper investments are seen as risky, bonds pay nothing and holding cash is a sure way to go broke over the long run as currency devaluations have become endemic. There has been a shift, particularly amongst hedge funds, away from certain equities and debt instruments and into hard assets, gold and resources.

Further compounding this growing trend is the widespread belief that Quantitative Easing is leading to dollar devaluation and therefore resource investments are very appealing as a long term hedge against potential losses. Stimulus leakage itself and the outcomes of investment changes that flow from this policy are now the impetus behind both a developing African growth story and some tremendous inflation pressures. These are the sources behind some of the stresses the people there are now facing.

An unfortunate outcome of this major trend change is therefore expressing itself in the form of some very serious price increases and negatively impacting those not just in Ethiopia but in all the poorest countries in the world. It must be kept in mind that in many countries across Africa and parts of Asia food and transportation are the largest components of their monthly expenses. The inflationary impacts of price increases in the double digits are therefore a serious hardship in a way that very few in North America can fully comprehend.

Today, Ethiopia is one of the largest coffee exporters in the world and not so surprisingly government revenues have surged on the back of the commodity price increases there and also from a host of other export products. Increased incomes from both private and corporate sources including the VAT tax have shot up a staggering 150% in only the last three months according to Nazret.com sources, and the Government is now on track to fully exceed its wildest revenue estimates.

In the simplest terms possible you might imagine that the price increases for food are therefore coming out of the pockets of the average person on the street and then miraculously reappearing on Government ledgers. Of course it is not that simple though and the differences between export revenues and increased consumption costs could hardly balance equitably. But this is not a bad news story and while Ethiopians are paying the price at the till on the one hand the country is experiencing tremendous growth on the other.

Why? Resource’s of course, with water and hydroelectric potential as the cornerstone of the country’s growing regional influence. Ethiopia has them in spades and China, amongst others wants in on that action. So they have shown up with what the country badly needs. Cold hard cash, engineering expertise and generous assistance with infrastructure improvements. Heck, they even send in their own people and equipment to get the jobs done. No hurry of course. Pay the bill later.

In the midst of this boom though, trouble is brewing and it is naturally political. A recently published article by The Economist quotes Prime Minister Meles Zenawi saying the Chinese were “generous and dependable” while backhanding the West and calling them neoliberals. This is not likely leaving a very good taste in Washington’s mouth where the efforts of many, many years of support and contributions to Ethiopian development aid are suddenly not yielding the expected returns. Nor are there smiling faces as it becomes apparent that China is recycling its US dollar balance of trade bounty into efforts that are appearing to be undermining US influence in the Horn of Africa.

It is no secret that Ethiopia has long been considered a key strategic ally in the region. That relationship may be at risk. With China now stepping in with investment money versus aid dollars they are winning the hearts and minds of the population who want jobs, not handouts.

In any event, Mr Zenawi has his own concerns and they are a real worry for his government. Many millions of young people in his country are heading into the workforce over the next decade. He needs to get them busy and fast. A quick look at Ethiopia’s population pyramid and you will know in an instant why the government is shoulder-checking for signs of future trouble and looking for new regional friends with deeper pockets and plenty of needs of their own. So what has developed with Asia is a marriage more than a friendship but it is certain to test Washington’s patience and resolve in the coming years as regional influence is now at stake.

Now one of the surprise upsides to this current commodities boom is that it has actually been beneficial to Ethiopia in many ways despite the extra financial burden it has place on the people.

The country has a suspected treasure trove of resources that are only now being explored but existing discoveries of Gold, Potash, Natural gas and many others are already well know. Exploration for diamonds is now underway in Welega Province by a junior miner out of Australia, holes are being drilled for the first time in the broad search for mineral deposits elsewhere and BHP Billiton is on the scene assessing the local Potash reserves. “China Mining United Fund” is said to be taking a serious look at the Allana potash deposits in the Rift Valley and there is a strong likelihood a partnership will be inked there in due course.

There has been a significant infusion of foreign capital inflows across the country over the last few years and it is now accelerating as new partnerships with Asian investor’s ramp up and jobs are being created. Capital is flowing in from India, Malaysia, Singapore, China, Australia, Canada and many other sources. As I have mentioned already, it is not so surprising that there has also been inflation to match the rapid growth and this has made life difficult for anyone trying to earn a living there (which is pretty much everyone).

The most recent inflation numbers released show that the annual rate is running ahead of 11% even before the commodities craze is priced into the equation. This is on top of last year’s 9% and a 2008 inflation rate that clocked in at a blistering 45%. And in a crazy upside down world, people there hold US dollars as an inflation hedge! This actually makes perfect sense really. Everything is relative isn’t it? And when both Gold and Silver are well beyond the financial means of virtually everyone then a store of Greenbacks is as good as gold itself.

Especially if your own currency is shrinking by the day.

According to the CIA fact-book, Ethiopian GDP growth was ringing in at 8.7% for 2009 while industrial growth exceeded 10% placing Ethiopia 5^thamongst nations on the growth scale. Exports were a paltry 1.6 billion dollars versus 7 billion in imports which is small potatoes by any standard but don’t let that dissuade you from the growth potential that now exists. Much progress obviously still needs to be made. US contributions to programs and aid when added to remittances from the Ethiopian Diaspora overseas, IMF forgiveness of some indebtedness and Chinese direct investment have helped make up some of the difference on the national ledger.

As mentioned, the Chinese amongst others are taking a very serious interest in the region. You may be surprised to hear that there is a construction boom going on there now. According to the Economist’s “The World in 2011” publication they have noted that Ethiopia and Eritrea of all places will be amongst the top three fastest growing economies of any country on earth this coming year. Growth there is anticipated to exceed 10% annually. Surprise! And you thought it would be China didn’t you?

Nazret.com, the Ethiopian news portal has reported this past week that Chinese investments in excess of 780 million dollars have been made in a wide variety of projects and activities including cement factories that have directly created 76,000 new jobs in the country. This is money in excess of development funds of nearly two billion already allocated by the Chinese Government for an ongoing infrastructure build-out. In the big picture, those millions might sound like spare-change to you but this is clearly very significant relative to Ethiopian export incomes and cannot be understated.

Just imagine for a moment that one single country invested in the US in an amount equal to half of all its export trade and you will then have some perspective on what is taking place over there. Now you get it.

In the background, there are 13 new universities being constructed or contemplated with the assistance of the German Government (GTZ) and related agencies that are designed to accommodate up to 148,000 new students. It’s a big initiative. According to Wiki, almost half the Ethiopian population is below the age of 14 while the median age is 16.8 and those over 65 account for just 2% of the population. That is one hell of a demographic picture. The US median age by comparison is 37 years while those over 65 account for closer to 12%.

Furthermore, health initiatives from a multitude of sources including the US Government, the Gates foundation, Canadian International Development Agency (CIDA) and a host of European NGO’s along with the efforts of hundreds of charitable agencies means the country is stronger and healthier than ever. Aids rates incidentally are amongst the lowest in Africa at 2% and dropping due to education and health initiatives.

The very low wages have also provided an opportunity and an outlet for some of Asia’s over-heating economies and as a result those countries are now actively outsourcing production themselves. And that is a big surprise to most people who only think of Asia itself as one monstrous insular factory for the world that does not share.

Rarely is it considered that production costs, particularly in China, have spiked due to the current high costs of real estate and growing incomes there and that they themselves are now seeking lower cost jurisdictions from which to maintain low-cost production. Much of Africa beyond Ethiopia is also now benefitting from these recent developments.

So Ethiopia is going into textiles in a very big way and factories have been springing up across the country. The Government of Meles Zenawi has openly welcomed the new investments and resource rights are being sold to interested parties as exploration for minerals ramps up. The government is stable and has been for many years now and the country is for the most part at peace. It is hard to find a friendlier, warmer place to visit actually.

But there is so much more to this developing story. China’s growing demand for construction materials has seen them investing in no less than eight cement facilities recently, both to supply voracious demand in Asia’s booming cities but also to provide the inputs needed for Ethiopia’s new dams construction projects.

Oh yes, the dams again. And here we have a very contentious issue developing that could boil over in the future. There are significant concerns being expressed by Egypt, a country that sees virtually no rain of its own and whose entire civilization depends on the flow of the Nile for its very survival as a nation. Worries that Ethiopia may hold back too much of the Nile flow have brought old threats of war back into the light as Egyptians come to grips with the consequences of the dam projects and concerns that countries life blood may be on the verge of drying up. A flashpoint exists over the issue of equitable water sharing and past agreements will need to be revisited.

For the moment, the details following the release of the new water data have amounted to no more than a war of words but that is no comfort in some quarters. Compounding problems, the US currently supports both Egypt and Ethiopia politically and financially. Brokering a new water deal is seen as a high priority for the region. Momentum is on Ethiopia’s side for now, particularly in light of China’s new interest and it is likely the disputes will need to be settled with the direct cooperation of both Washington and Beijing.

To date, five large Dams have been built across Ethiopia and many more are proposed including a new one on the Blue Nile financed by Sino-Hydro, the same folks who built the Three Gorges project. The new Gibe III project on the Omo river meanwhile will be the highest dam in Africa at 245 meters and is projected to generate 1870 MW of new power. According to The Guardian, Ethiopia now has the potential to generate more than 45,000 Megawatts of power in aggregate. And that is a very big story in North Africa. All the more so because there are 9 other countries downstream that all share in the water wealth that flows from Ethiopia’s highlands and upon which millions in the Nile Basin depend for irrigation, drinking water and transportation.

So the Chinese have brilliantly seized on the obvious hydroelectric potential of the region and it is true that barring conflicts it is well within Ethiopia’s destiny to become an African energy superpower within the next decade. Clean energy too. Plans are already being drawn up to export power to Sudan, Kenya and other neighbours on the basis of multi mega-watt capacity coming on-stream over the next few years.

But the real power is destined for domestic industrial needs and to meet Chinese demands for inputs to its own economy. Ethiopia as it turns out is strategically positioned for energy intensive factories and related facilities including cement production, bricks and steel. It should come as no surprise then that Chinese based steel-making enterprises have become one of the big partners recently in this evolving investment scene. And it certainly does not hurt that incomes in Ethiopia are the lowest in the world. Getting all the new facilities up and running is a cakewalk when it comes to cash.

Ethiopia is certainly not all a parched dry wasteland as many might have imagined. Although almost totally devoid of trees from end to end, much of it is wet and green, particularly in the highlands, and this is why hydroelectric is such an obvious solution to the growing power needs there and the industrialization that is currently underway.

The rains unfortunately are not always predictable and this has been at the root of some past disasters and famines as irrigation has not been sufficiently developed to date to ensure steady agricultural productivity. That is all about to change though.

You seriously cannot believe how fast this poor country is developing and much of it can be attributed nearly exclusively to growth dynamics out of Asia. The Chinese in particular as already mentioned have moved into the country in a very big way and are busy building roads, dams, irrigation systems and bridges across the country. Things are changing for the better. And fast.

So in a surprise twist, what is arguably the poorest country on earth is actually one of the world’s biggest investment and growth stories of the year. Don’t believe me? Go and see it for yourself. Ethiopian Airlines is well known as the best carrier on the continent sporting the newest fleet of Boeing 737’s and 777-200’s and one of the safest flight records anywhere.

This past two years alone Ethiopian Airlines have acquired or placed on order 35 new Aircraft including 10 state-of-the-art Dreamliner 787’s to add to their growing fleet. An expansion of Addis Ababa’s Bole International airport which is considered Africa’s primary air hub and hosts almost 4 million passengers annually is ongoing to accommodate the growing traffic and congestion. (And you thought all those people were starving over there, right? So what’s up with all the Dreamliners then?)

The on-board food is terrific incidentally.

Back in Addis meanwhile folks are both optimistic and stressed. Their wages are on the rise but are not keeping up with the loss of buying power caused by the recent Birr devaluations nor keeping pace with the fast rising costs of virtually all their daily needs.

It can only be hoped that the recent developments eventually lead to a higher standard of living for the country and that it can build its way out of the grips of poverty that have been its hallmark for most of the past century. Industrialization, resources and key partnerships are the ticket to a better future for Ethiopia and are the fuel behind its recent growth story.

And it is not too late to get involved for those with speculative capital and minds open to a wide variety of surprising opportunities. The country is open to investment and a small amount of money can go a very along way indeed and yield potentially explosive results. And that sounds like advertising doesn’t it? Well it is not. One fact alone is that fewer than 1.5 in 100 people in Ethiopia have a cell phone today according to a recent (ITU), International Telecommunications Union report. That is the lowest concentration in all Africa and amongst the lowest anywhere on earth. There is naturally a huge pent up demand for technology of all kinds, a youthful population and a growing belief that change has arrived. The advent of optimism combined with that youth, new consumer demands and rising incomes is of interest to every serious investor.

There are obvious difficulties for anyone trying to invest in this market of course. The country does not yet have its own stock exchange, credit and debit transactions are virtually unknown across the country, few individuals have bank accounts and the banking sector itself is still working through its developmental stage. Some might see opportunity in that though. The real potential is open for the most intrepid investors who simply go in person to get something started. And you could not be closer to the ground floor in any other country. Nobody said investing there would be easy. For most, for the foreseeable future, it just makes more sense to invest in Asian companies that are already active there or more directly in the juniors and small caps that are currently searching for minerals.

Like much of Africa, Ethiopia has energy to burn and a desire to break from the bonds of the past. Demographics tell us there is tremendous potential there and a lot of future customers. Asian direct investment tells us that development is being fast-tracked and this is a country you will want to follow if emerging markets are your cup of tea. And last, Ethiopians themselves are telling us they want to be an integral part of the global community. This is truly a growth story.

If you remain doubtful that Ethiopia has potential I just want you to watch this short video of a concert in Addis Ababa. It is a little rough and almost certainly made with a cell phone but if this does not convince you the country has energy, then nothing ever will. Beyonce is there up front and she leads a show backed by Teddy Afro, one of Ethiopia’s most famous musicians. Have a listen and look at Ethiopia 2010.

http://www.youtube.com/watch?v=BFheOwMW28Q&feature=related

This 5 minute clip should tell you everything I cannot say in words alone. Hopefully this will open your eyes to one of the very biggest developing stories in the world today. It is about the new Africa, the world’s last big frontier and a Wild West of investment opportunities. The potential is tremendous and those people sure look hungry all right. But in a way you probably never expected.

So forget the sad imagery of the past. These people are hungry for their piece of the action.

Merry Christmas!

Booming Ethiopia Is the New Face of Africa

2010-12-22T23:37:00.000-08:00

BY RICK ACKERMAN ON DECEMBER 23, 2010 1:24 AM GMT ·

(Here’s a man-bites dog story from Cam Fitzgerald, a frequent contributor to Rick’s Picks who lived for a while in Ethiopia. Cam paints a picture of an African nation that will be unfamiliar to many readers; for in fact, even though Ethiopia has only begun to emerge from poverty, its economic prospects are as bright as you will find anywhere on the African continent. To understand why, read Cam’s first-hand report . RA)

This is a growth story. A few years ago, I spent some time living in Ethiopia. I was in the suburbs of Addis Ababa, getting to know one terrific family in particular: the mother, who was the real head of the household; the father, Abba, a shoemaker; and his four single daughters, all in their thirties. What could possibly go wrong? OK, I am already getting off track. This is supposed to be an article about Ethiopia’s boom and the inflation that has come in its wake. I call the daughters “my gals” when I talk about them with friends, and we keep in touch almost daily via e-mail. One is a student, and the other three work: as a translator, a seamstress and a secretary. They all have good educations, speak English and are in every way typical of women you might meet anywhere in the world: the same hopes and dreams, the same troubles with men and the same daily worries about meeting the bills, making ends meet and trying to save.

Well almost the same. You see, these women earn a grand total of 2900 Ethiopian birr in monthly income between them. That’s roughly $175 dollars for six people to share — a fairly typical income in Ethiopia. However, I never thought of the family as poor during the time I knew them. They own a home, are well educated, eat well, and the girls were always “dressed to kill,” so on the surface it all looked pretty normal to me. Expenses are regional and relative, and so daily costs there are generally incredibly low. But come on! A buck a day per person is just not enough money! Nevertheless.

16.5% Devaluation Overnight

So the cost of living is low. At least it was. Until the Central Bank, in a surprise announcement last month, devalued the currency by 16.5% in a single day, making it the fourth devaluation in less than two years. Monetary policy was being used as a means for the country to retain a competitive export advantage, and to manage its currency’s float against the U.S. dollar. A falling dollar in effect precipitated the action by the Ethiopian Central Bank. So, this was no stealth devaluation — it was all in-your-face.

Compounding worries for my girls is the recent commodity boom and an attendant, sharp price increase in cotton, coffee, cocoa, wheat, canola, and of course cooking fuel (kerosene). The problem they are facing is that commodities, while locally sourced, are not locally priced, as they are subject to global competition and speculative forces. Prices are set in the futures markets. So despite being an agricultural country and net food exporter, Ethiopia and its people face the same market dynamics and price hikes that we are about to experience in the West. (This story is indirectly about us, as you will see). And because Ethiopia is primarily an agricultural exporter, the new prices hit the streets almost as fast as they changed on the boards in New York and London. It is no joke that Ethiopians are now unable to afford buying some of the produce of their own country. Following this last price spike, coffee is almost out of the question.

Coffee a Luxury

Since the summer, the cost of a kilo of coffee has climbed from about$ 2.20 U.S. to more than $4 –a price spike of almost 100%. Buying coffee on a daily budget of a dollar is not just prohibitive, it is a sacrifice and a luxury. This irony is not lost on the people living right in the midst of the country where coffee was originally discovered, and where it is still a primary exports.

The gals have been pretty worried lately. They are stoic, though, and rarely complain, even though the price of flour is also up over 70%, cooking oil by 50%, and onions (of all things) by an incredible 250%. And you thought we had inflation worries in the U.S.! Ethiopia’s Central Statistical Agency (CSA), meanwhile, reports for 2010 that tobacco has risen 34%, clothing 25% and rent, fuel and power have collectively risen by over 16%. Yikes! All of this is an outgrowth of a shifting, global investment dynamic that has made paper investments risky; where bonds pay nothing; and where holding cash is a surefire way to go broke over the long run. There has been a shift, particularly amongst hedge funds, from certain equities and debt instruments and into hard assets, gold and resources.

Exacerbating this trend is the widespread belief that quantitative easing is leading to dollar devaluation. This makes resource investments very appealing as a long-term hedge against inflation. Stimulus leakage itself, as well as the outcomes of investment changes that flow from quantitative easing, are now driving the African growth story even as they exert tremendous inflationary pressures. These are the sources behind some of the stresses the people there are now facing.

Inflation’s Hardships

An unfortunate outcome of the new dynamic is big price increases that negatively impact not only Ethiopians, but people who live in the poorest countries in the world. Keep in mind that in many countries across Africa and parts of Asia, food and transportation are the largest components of household budgets. Double-digit inflation therefore inflicts hardship in a way that very few North Americans can fully comprehend. Today, Ethiopia is one of the largest coffee exporters in the world, and not so surprisingly, government revenues have surged on the back of commodity price increases and export growth. Increased incomes from both private and corporate sources including the VAT tax have reportedly shot up a staggering 150% in just the last three months, and the government is on track to fully exceed its wildest estimates.

To look at it one way, the price increases for food are coming out of the pockets of the average person on the street and then miraculously reappearing on government ledgers. While it is not quite simple, the differences between export revenues and increased consumption costs could hardly balance equitably. But this is not a bad-news story, and while Ethiopians are paying the price at the till, the country is experiencing powerful growth on the other. Why? Because the country possesses abundant natural resources. Ethiopia is a veritable cornucopia, and China (amongst others) wants in on the action. So they have shown up with what the country badly needs: hard cash, engineering expertise and generous assistance with infrastructure improvements. They even send in their own people and equipment to get the jobs done. No hurry of course. Pay the bill later.

A Happy Surprise

The happy surprise is that the commodities boom is beneficial to Ethiopia in many ways. The country’s natural resources are only now being explored, even as known quantities of gold, potash and natural gas are being exploited beneficially. Diamond exploration is under way in Welega Province by an Australia miner, Nyota (ASX:NYO). From what I know, they are almost certain to find some there. As a result, employment numbers are up across the country and there has been a significant infusion of foreign investment over the last few years. Capital is flowing from India, Malaysia, Singapore, China, Australia and many other sources. Not so surprisingly, there has also been inflation to match the rapid growth, and this has made life difficult for the working man or woman.

The most recent inflation data show that the annual rate is above 11% even without considering commodities. This is on top of last year’s 9%, and an astounding rate of 45% in 2008. If you can believe this, people there hold U.S. dollars as an inflation hedge! This actually makes perfect sense, since inflation is relative. And when both Gold and Silver lie beyond the financial means of virtually everyone, then a store of greenbacks seems as good as gold itself. Especially when the value of your own currency is shrinking by the day. According to the CIA fact-book, Ethiopian GDP growth was running at 8.7% for 2009 while industrial growth exceeded 10%, making Ethiopia the world’s fifth fastest-growing economy. Exports were worth a paltry $1.6 billion U.S. versus $7 billion in imports. Obviously, there is much progress needing to be made. However, as U.S. contributions to programs and aid have added to remittances from the Ethiopian diaspora, IMF forgiveness of some indebtedness and Chinese direct investment have made up the difference, bringing the country’s budget nearly into balance.

Chinese Investors

As noted above, the Chinese, among others, are taking a very serious interest in the region, which is enjoying a construction boom. According to The Economist, Ethiopia and Eritrea will be among the three fastest-growing economies in the world in 2011. Wow! Growth there is anticipated to exceed 10% annually. Surprise! And you thought it would be China, didn’t you? Nazret.com, the Ethiopian news portal, just reported Chinese investments exceeding $800 million in a wide variety of projects and activities, including cement factories that are creating thousands of new jobs. This might sound like chump change, but it is in fact very significant relative to Ethiopian export incomes.

Imagine for a moment that a single country invested in the U.S. a sum equal to half of America’s exports trade, and you can see what is happening to Ethiopia. In the background, up to 16 new universities are being constructed or are near completion, courtesy of the German government and related agencies. According to Wiki, nearly half of Ethiopia’s population is below the age of 14, and 60% of it is below 30. Quite a contrast to the burgeoning retiree population of Western nations. Furthermore, health initiatives from a multitude of sources including the U.S. Government, the Gates Foundation, Canadian International Development Agency (CIDA) and a host of others are making the country stronger and healthier than ever. At 2%, AIDS rates are among the lowest in Africa and dropping due to education and health initiatives. Relatively low wages have also enticed some of Asia’s overheated economies into outsourcing to Ethiopia. This might seem surprising, since many people think of Asia itself as one monstrous factory. Rarely do we consider that production costs, particularly in China, have spiked due to the ongoing real estate bubble, and that the Chinese themselves are eager to hold down production costs by outsourcing. Much of Africa beyond Ethiopia has been benefiting from this development.

A Friendly Place

As a result, Ethiopia has been ramping up its textile business at a feverish pace, and factories have been springing up across the country. The government of Meles Zenawi has openly welcomed new investments, and resource rights are being sold to interested parties as exploration for minerals ramps up. The government is stable and has been for many years, and the country is more or less at peace. It would be hard to find a friendlier, warmer place to visit.

But there is so much more to this story. China’s growing demand for construction materials has seen them investing in no fewer than three cement facilities recently to supply voracious demand in Asia’s big cities, but also to build dams in Ethiopia. Dams? Yes. Few of you reading this will know that the Nile River’s main source of water – as much as 85% of it, according to one recent estimate — lies in the Ethiopian highlands. This has raised concerns that Egypt may someday receive less than what it currently believes is equitable. Ethiopia is by no means the parched wasteland that many imagine it to be. To the contrary, although almost devoid of trees, much of the country is wet and green, particularly in the highlands, and this is why hydroelectric is such an obvious solution to the country’s growing power needs.

The rains unfortunately are not always predictable, and this has been at the root of some past disasters and famines, as irrigation has not been sufficiently developed to ensure steady agricultural productivity. But growth has been phenomenal, due in large part to the needs of a burgeoning Asia. The Chinese in particular have moved into the country in a big way and are busy building roads, dams, irrigation systems and bridges across the country. Things are changing for the better, and quickly. Thus, in a surprise twist, what is arguably the poorest country on Earth is actually one of the world’s biggest investment and growth stories of the year. Don’t believe me? Go and see it for yourself. Ethiopian Airlines is well known as the best carrier on the continent, sporting the newest fleet of Boeing 737’s and 777-200’s, as well as one of the safest flight records anywhere.

This year alone, Ethiopian Airlines have acquired or placed on order 38 new aircraft including ten state-of-the-art 787’s. An expansion of the Bole International Airport, which is considered Africa’s primary air hub and which hosts almost four million passengers annually, is ongoing to accommodate growing air traffic and congestion. The on-board food, incidentally, is terrific.

Capitalists Welcome

Back in Addis, meanwhile, my gals are feeling very stressed. Their wages are on the rise but are not keeping pace with the loss of buying power caused by the recent birr devaluations, nor with the fast pace of rising costs for nearly all of the things they need. I can send cash to help out, of course (and I do), but the girls represent only one small family in a country of more than 80 million people. What about everyone else? I worry, too, for my friends over there, and I can only hope that the recent developments eventually lead to a higher standard of living, and that Ethiopia can escape the grip of poverty that has been its hallmark for most of the past century. Industrialization and resources are clearly the keys to Ethiopia’s future, the fuel behind its recent growth story. It is still early in the game for capitalists to get involved. The country is open to investment, and even a relatively small sum can yield potentially explosive results.

If that sounds like advertising, consider that fewer than 1.5 people in 100 have cell phones, according to a recent report. That is the lowest concentration in all of Africa, and among the lowest in the world. There is huge pent-up demand for technology of all kinds, a youthful population and a growing (although still tiny) middle class. Like much of Africa, Ethiopia has energy to burn and a desire to break from the bonds of the past. Demographics tell us there is tremendous potential there and a lot of future customers. Asian direct investment tells us that development is being fast-tracked. This is a country you will want to follow if you are an investor who is interested in emerging markets. And last, Ethiopians themselves are telling us they want to be an integral part of the global community. This is truly a growth story.

If you remain doubtful that Ethiopia has potential, check out this short video of a concert in Addis Ababa. It is a little rough and almost certainly made with a cell phone, but if this does not convince you the country has energy, then nothing will. Beyonce is center stage, and she kicks off a show featuring Teddy Afro, one of Ethiopia’s most famous musicians.

This five-minute clip should tell you everything I cannot say in words alone. Hopefully, it will open your eyes to one of the very biggest development stories in the world today. It is about the New Africa, the world’s last big frontier, and a Wild West of investment opportunities. The potential is tremendous. All of those people look hungry, all right — but in a way you probably never expected. So forget the sad, sad imagery of the past. These people are hungry to join the party!

Banking Sector Generates 88 Million US Dollars to Ethiopia

2010-12-22T06:32:00.000-08:00

BY NEW BUSINESS ETHIOPIA REPORTER

Ethiopian government has collected a total of one billion and 458 million birr (88.2 million US dollars at the current exchange rates) in profit tax from both private and government banks operating in country in 2009/10 fiscal year (July 8, 2009-July 7, 2010).

Ethiopian Government revenue from banking sector as Illustrated by newbusinessethiopia.com

The income of the east African country from private banking sector has grown by 39 percent for the fiscal year 2009/10 compared to the preceding year.

Ethiopia’s income in profit tax from the ten private banks in the country, which have began making profit, has increased by 162 million birr in 2009/10 fiscal year from the previous fiscal year. It reached 580 million birr (around 35 million US dollars at the current exchange rates).

Ethiopian banking sector data collected by newbusinessethiopia.com shows that the giant state-owned bank in the country, Commercial Bank of Ethiopia, has paid 840 million birr (50.8 million US dollars at the current exchange rates) profit tax in 2009/10 fiscal year which is 46 million birr higher than the preceding fiscal year.

Banking sector in Ethiopia has also created jobs for a total of around 24,000 citizens. Out of which 13,000 are employed by the ten private banks that already began declaring profit.

The number of employees in the sector and government earning is also expected to increase next year as the new banks such as Abay, Debub global, Hawassa, Enat and Noah banks will go fully operational.

As almost all banks in the country began start making profit during their second year of operation, Bunna International Bank is also expected to contribute for the 2010/11 fiscal year tax income increment of the country from banking sector.

Ethiopia Gets $224.3 Million Funding for Power Lines

2010-12-21T21:57:00.000-08:00

By William Davison

(Updates with comment from ADB in second paragraph.)

Dec. 21 (Bloomberg) -- Ethiopia secured $224.3 million from the African Development Bank to fund the construction of four electricity transmission lines to improve its own power supply and help development in neighboring countries, the lender said.

Additional transmission capacity is “critical and timely” for Ethiopia’s industrial development, said Lamin Barrow, the AFDB’s resident representative, by phone today from the capital, Addis Ababa. The lines will connect areas in the north, east and south-west of the country, and help expedite plans to export power to Sudan and Kenya, he said.

Under a five-year plan, Ethiopia, which suffers from intermittent blackouts, plans to quadruple power generation to at least 8,000 megawatts and expand electricity coverage to 75 percent of the population from 41 percent now. A lack of transmission lines is hindering attempts to export power, the state-owned Ethiopian Electric Power Corp. said on Dec. 8.

The Tunis-based African Development Bank will lend Ethiopia 61 percent of the funds and donate the rest, Barrow said.

The project, which will see 948 kilometers (589 miles) of 230-volt cables laid, is scheduled to finish in Aug. 2013, Barrow said. Eight new sub-stations will be built and another 11 upgraded under the plan, he said.

--Editors: Alastair Reed, Tony Barrett.

To contact the reporter on this story: William Davison in Addis Ababa via Johannesburg at pmrichardson@bloomberg.net

Power Engineering Names Renewable Project of the Year

2010-12-15T22:15:00.000-08:00

By Lindsay Morris, Associate Editor, Power Engineering

At a gala banquet at POWER-GEN International in Orlando, Fla., on December 14, Power Engineering magazine's editors recognized the 2010 Projects of the Year Award finalists and announced the winners.

Orlando, Florida, USA -- This year's Power Engineering Projects of the Year Award winners and honorable mentions represented facilities and/or technology that signified excellence in four categories: coal-fired, gas-fired, nuclear and renewable/sustainable.

Best Renewable/Sustainable Projects

Tekeze Hydropower Project

The Tekeze Hydropower project in Ethiopia, located on the Tekeze River, a tributary of the Nile, is the Project of the Year for renewable/sustainable projects. The $350 million project, funded by the government of Ethiopia and owned by Ethiopian Electric Power Corp., adds 40 percent more electric capacity to the country and was the largest public works project in Ethiopia’s history at the time of construction. Due to the lack of natural resources and the cost of imported fuels, power generation in Ethiopia comes primarily from hydroelectric sources.

The Tekeze Hydropower project is the tallest arch dam in Africa at 188 meters. The 300 MW facility includes a double curvature concrete arch dam, a method of design that minimizes the amount of concrete used. It created a reservoir 70 kilometers in length. An underground powerhouse containing four 75 MW Francis Turbines sits 500 meters downstream of the dam and is fed by a 75-meter-high intake structure connected by a 500-meter-long concrete-lined power tunnel. A 230 kV double-circuit transmission line 105 kilometers long was constructed through mountainous terrain to connect to the Ethiopian national grid.

The project’s beginnings date back to 1995 when the Ethiopian Ministry of Water Resources conducted a study identifying the site as one of two preferred dam sites for hydropower development. MWH joined the project in 1998 and made modifications to an existing design for the dam, powerhouse and tunnel system, resulting in cost savings.

A multi-stage impoundment approach was implemented during construction, which allowed the river diversion to be closed in May 2007, nearly two years prior to dam completion. This allowed for more than 3 billion m³ of water to be retained, advancing generation by more than one full year. The value of the water captured via early impoundment was worth approximately $40 million. In addition to power generation, the Tekeze dam enables regulation of river flow, allowing downstream communities year-round access to the water supply.

A 10-year 2000m³/sec flood on Aug. 9, 2006 was an unexpected test for the dam. The dam proved its ability as a gravity structure and no damage was incurred to any of the permanent structures.

Local community infrastructure was improved as a result of the project, including construction of more than 40 kilometers of roads and installation of the first communications links from the area to the outside world. Also as a result of the project, education was improved in the area as the wife of the MWH chief design engineer spearheaded efforts to build a new school near the village of Seboko. The school was financed by contributions from engineers, contractors and staff working on the project, local residents and a supportive local government.

On-the-job training was also provided to locally-hired employees. Ethiopian Electric Power Corp. implemented programs to provide education and training to local workers. Programs included education to combat AIDS, malaria and other safety, health and welfare issues affecting the local community.

Honorable Mentions

Canoe Creek Hydroelectric Project

Canoe Creek Hydro is a 5.5 MW run-of-river hydroelectric facility on Vancouver Island that provides power to a remote community on the island and helping the island become less reliant on mainland power. The facility is owned and operated by the Tla-o-qui-aht First Nation and located in the heart of the Nation’s Tribal Parkland. The Barkley Project Group Ltd., along with Amnis Engineering and Hazelwood Construction One, worked with Vitaulic, a manufacturer of mechanical pipe joining solutions, to develop Canoe Creek. Construction started in May 2009 and ended in May 2010. The plant went into service in June.

Canoe Creek Hydro operates by diverting stream flow into a penstock at a high elevation – up to 84 percent grade – intake. This made construction a challenge, as did the facility’s location in the Pacific Rim Rainforest, where annual precipitation is amongst the heaviest in the world, particularly in the winter months when construction took place.

Constructing the 4-km-long penstock line in these conditions using welding techniques would have proven difficult. Instead of using mechanical welding on the penstock, the companies used mechanical couplings. In the field, the couplings proved advantageous in many ways. For example, couplings could be installed in any weather condition with no special requirements. Couplings also reduced the amount of excavation, bell holing and dewatering that would be common with welding.

Couplings also improved site safety. As the pipe was already on site, Hazelwood grooved and re-coated the pipe prior to sending it up the single-lane logging road for assembly. In addition, the replacement of welding with mechanical joints allowed for a reduction in the number of laborers required on the job site. Canoe Creek also employed local laborers.

Environmental benefits were also gained by replacing welded joints with mechanical joints. Welding one kilometer of straight-run 36-inch pipe produces about 40,338 kg of CO₂ emissions using a diesel-powered machine and 9,463 kg of CO₂ emissions using an electric-powered machine. Grooving and coupling that same run of pipe produces 62 kg of CO₂ emissions. The use of couplings also reduced the amount of x-raying required on site, reducing radiation emission. PM, CO₂ and radiation were reduced, as well as electrical energy use.

Biogas facility owned by PurposeEnergy, Inc.

This biogas facility project at the Magic Hat Brewery in South Burlington, Vt. allows the owner, PurposeEnergy Inc., to use organic waste streams and generate biogas. The biogas is then used by the brewery’s steam boilers and/or PurposeEnergy’s cogeneration plant. In mid-2008, Pizzagalli Construction Co. was selected as the design/build partner for this $3.4 million project at New England’s largest craft brewery. This brewery waste recovery system was developed by CEO and founder of Purpose Energy, Eric Fitch.

Underground process piping, stone aggregate piling for the digester, structural excavation and backfill and all of the concrete work began in December 2009. A 1,600 square foot mechanical building was built and a digester tank was installed. The piping process was completed by May 2010 and the facility began operations in June 2010.

PurposeEnergy’s Biphase Orbicular Biodigester was designed for brewery by-products and enables the conversion of high solids content brewery waste into carbon neutral, renewable biogas. This system is also designed to utilize the waste heat from the generator’s exhaust, coolant and engine oil to heat the digester and preheat the water used in the brewing process.

The PurposeEnergy project has brought many benefits to the facility and environment. By diverting the waste stream created during the brewing process, the brewery’s operating costs have been reduced as Magic Hat Brewery no longer needs to pay for waste treatment surcharges, thereby reducing traffic, noise and air pollution that would result from the transportation of the waste. In addition, the use of this technology creates a clean, carbon neutral energy source that decreases the effects of greenhouse gases on the environment.

Ethiopia tops list of African nations improving quality of life

2010-11-04T22:30:00.000-07:00

by Sean McLachlan (RSS feed) on Nov 4th 2010 at 2:00PM

Ethiopia suffers from a bad image thanks to the war and famine of the 1980s. As my series ontravel in Ethiopia showed, however, this is a land of friendly people, beautiful nature, and fascinating historic sites. Infrastructure is slowly improving and the Ethiopians are making serious efforts to boost education, access to clean drinking water, and other improvements to the quality of life.

These efforts have been recognized in the UN's 2010 Human Development Report. It ranked Ethiopia as number 11 in the world for improving human development since 1970, the highest ranking in Africa. The report was prepared by the United Nations Development Programme and measures progress in health, education, income, gender equality, and other areas. Researchers then formulate a "human development index" (HDI) for 135 countries.

Other high-ranking African nations include Botswana (14th), Benin (18th) and Burkina Faso (21st). All of these countries and some others have done especially well in the past ten years. Only looking at the past decade, Burkina Faso, Ethiopia, Mozambique, Rwanda, and Uganda all come out in the global top ten.

One of the biggest areas of improvement was in education. Literacy has almost tripled in Sub-Saharan Africa in the past 40 years to 65 percent. Also, life expectancy is up and infant mortality is down.

Sadly, not all the news is good. The Democratic Republic of the Congo, Zambia, and Zimbabwe were the only three countries in the world where quality of life actually went down.

Good news for Ethiopia is good news to travelers too. While the country is still an adventure travel destination, it's not as rugged as many people think. I spent two months there and my wife spent three weeks, and in all that time we never got sick. Chalk one up for good sanitation and clean water! Also, Ethiopia scores well of gender equality, which meant that, unlike some countries we've been to, my wife didn't get harassed by obnoxious guys. Good education meant we met lots of people who spoke English and wanted to improve it by chatting with us. Improved infrastructure meant there were more paved roads along our route than there were ten years ago.

When it comes to improvements in a country's Human Development Index everybody benefits, even people who don't live there!

BBC apology over Band Aid money reports

2010-11-03T23:02:00.000-07:00

A report on World Service's Assignment in March claimed large sums of charity money had been diverted by rebels.

Although the report did not directly link Band Aid, other BBC outlets suggested its money had been involved.

The corporation said it apologised unreservedly for the "misleading and unfair impression" which was created.

The original investigation by the BBC's Africa editor, Martin Plaut, included claims that substantial amounts of aid from Western government and charities went into rebel-held areas of Tigray province in 1985 and was used to buy weapons.

In a complaint to the BBC, The Band Aid Trust said the programme and subsequent coverage by other outlets including Radio 4, BBC News and the BBC News website gave the impression most of the money raised by the charity had been diverted.

'Unusual lapse in standards'

After an investigation by the BBC's Editorial Complaints Unit, the corporation concluded there was no evidence relating to money raised by Band Aid or Live Aid, and statements alluding to the fact should not have been broadcast.

The BBC also apologised to Band Aid Trustee Bob Geldof for implying he declined to be interviewed "because he thought the subject too sensitive to be discussed openly".

In response, Mr Geldof said: "This was an unusual lapse in standards by the broadcaster and, most critically, the World Service.

"It was Michael Buerk's frontline reports for the BBC from Ethiopia which prompted me to act and establish Band Aid in the first place and I recognise the important journalistic and humanitarian role the BBC has played in our story.

"We welcome the BBC's apologies and hope that the public corrections can begin to repair some of the appalling damage done, and move forward."

In a statement, the BBC said it regretted the error and "accepts we should have been more explicit in making it clear that the allegations did not relate specifically to Band Aid".

"Assignment did not make the allegation that relief aid provided by Band Aid was diverted. However the BBC acknowledges that this impression could have been taken from the programme," it said.

"We also acknowledge that some of our related reporting of the story reinforced this perception."

It added: "We note that the ruling validates the main thrust of the programme's journalism; that there was evidence from a number of sources that the Tigrayan People's Liberation Front had diverted money intended for famine relief and that some of this was spent on weapons."

On-air apologies will be made on all the BBC outlets that broadcast the claims.

Ethiopian Haile Gebrselassie wins the Great North Run

2010-09-21T00:54:00.000-07:00

The Bupa Great North Run, Gateshead:
Coverage: Highlights on BBC Two and online from 2310-2340 BST

Gebrselassie wins 'special' Great North Run

Ethiopia's Haile Gebrselassie powered to an emphatic victory in his first Great North Run in Gateshead on Sunday.

The two-time Olympic 10,000m champion was unable to threaten the 2005 course record of 59 minutes 05 seconds.
But the marathon world-record holder, 37, surged clear at halfway to win by a huge margin from Kenya's Kiplimo Kimutai in a time of 59:33.
Fellow Ethiopian Berhane Adere won a tough women's race, with British runner Mara Yamauchi fifth.
Gebrselassie was fulfilling a long-time promise made to race chairman Brendan Foster by taking part in the race.

What is important is to win - the Great North Run is very special

Haile Gebrselassie

In the 30th running of the event, run in cool, overcast conditions, the half marathon world record-holder finished 1:50 ahead of Kimutai with Morocco's Jaouad Gharib third.
"It was wonderful," Gebrselassie told BBC Sport. "I needed someone to keep the pace until the last 2km and maybe then it would have been faster, but I was on my own most of the race.
"What is important is to win - the Great North Run is very special.
"I have been dreaming for many years of racing here. I kept promising that I would come and finally I've made it."
His compatriot Adere, who won the women's race in 2006, pulled clear with two miles remaining and finished in 68:49 to beat Portuguese duo Ana Dulce Felix and Marisa Barros.
Yamauchi, Britain's leading woman runner, was unable to keep up with the pace but was happy with her time of 70:39 as she builds up towards a tilt at November's New York Marathon.

"It was a reasonable time," the 36-year-old told BBC Sport. "I was hoping to go a little bit quicker but hopefully in another month I'll be going quicker."
Andrew Lemoncello was the leading British male, finishing in ninth place in 63:48.
Britain's Paralympic medallists David Weir and Shelly Woods won the men's and women's wheelchair races.
Weir held off Canada's Josh Cassidy, who pipped him to the line in April's London Marathon, to win the event for the fourth time in 44:49 while Woods chalked up her third triumph in 52:59.
Around 54,000 runners took part in the race from Newcastle to South Shields.

Haile Gebreselassie is like the Becks of running

2010-09-18T06:34:00.000-07:00

Sep 18 2010 by Luke Edwards, Evening Chronicle

HAILE GEBRSELASSIE’S first appearance in the Great North Run will be watched by more than 11 million Ethiopians as the David Beckham of long-distance running finally fulfills a decade-old promise.

Gebrselassie is arguably the greatest long-distance runner of all time and is one of the most famous faces in Ethiopia after winning Olympic goal medals and breaking 26 world records over a variety of distances.

The 37-year-old will finally compete in the Great North Run tomorrow 10 years after he pulled out of the event because of an Achilles injury just a month after he took gold in the 10,000 metres at the Sydney Olympics.

And that will ensure the event celebrates its 30th birthday with its largest ever television audience.

Gebrselassie said: “Running in Ethiopia is like soccer is here in England. The popularity and interest is the same. In Ethiopia, people are always looking for the results of all the big races. The interest over there is crazy.

“I don’t do any training in the city – I do my training outside. When I train, people shout at me and call out my name all the time.

“In the city, it is hard for me to run. Many people recognise me, so it is hard to get on with my work.

“It is probably like being a soccer player in England. I’m not sure if it’s quite the same as being David Beckham, but maybe it’s something like that.”

Gebrselassie intends to return to England in 2012 to run in the Olympic marathon, but he does not even know if he will qualify for the Ethiopia team. That should also serve as a reality check for Britain’s long-distance hope and European champion Mo Farah.

The Ethiopian said: “It is a massive ambition to compete in 2012. I hope I am one of the names there.

“That would mean a lot to me, but it will not be easy. I have to qualify first, and because of all the competition in Ethiopia, it will not be easy.

“To be in the top three in Ethiopia is hard. In many ways, qualifying for the team will be even harder than doing well in London.”

Ethiopia Claims Ever-Larger Role In International Flower Trade

2010-09-18T02:39:00.000-07:00

by Staff Reporter, Florint.org Posted: Friday, September 17, 2010 at 11:11AM EDT

Over the past few years the Ethiopian flower export has shown a substantial increase, resulting in many thousands of new job opportunities as well as growing foreign exchange earnings. Flowers have in fact become the second most important Ethiopian export product, rivaled only by the trade in coffee.
Exports as a whole have grown immensely in the horn-of-Africa country, but fresh flowers are certainly taking the cake. The Ethiopians have earned more than 250 million dollars from flower exports in the last ten months alone, according to Agriculture and Rural Development State Minister Aberra Deressa.
That is only the beginning, as far as the Ethiopian government is concerned. Further expansion of the production of flowers, fruits and vegetables for export is in the works. Although Kenya remains the major flower exporter on the continent as it stands, a number of investors have already made the switch to Ethiopia. The financial incentives the government offers play a significant role in that decision, and will likely ensure the continuing growth of the Ethiopian flower industry. A growth that currently significantly outpaces that of rival Kenya already.
To read the rest of this story please go to: Florint.org

Ethiopians Prefer Driving Home-grown Cars

2010-09-07T02:17:00.000-07:00

MONDAY, 06 SEPTEMBER 2010 09:22 NEWBUSINESSETHIOPIA.COM

By Luc van Kemenade NEW BUSINESS ETHIOPIA CONTRIBUTOR
With public purchasing power on the rise, Ethiopia’s small but emerging middle class yearns to cruise around Addis Ababa in style. They refuse to pay sky-high import taxes for second hand cars. Instead, they prefer driving around in home-grown vehicles.

A model by Lifan motors, Former Partner of Holland car plc now its market competitor

The supply of new models assembled in Ethiopia increases and this is reflected in the streets of the capital city. More often the “Ethiopian” cars appear among the chaotic traffic that is still dominated by rundown Lada cabs and Toyota Corollas.

It costs a small fortune to get a second hand vehicle from the West through the port of Djibouti into landlocked Ethiopia. Although taxes have been reduced, they can still rise up to over 100 percent of the purchase value plus the transportation costs, i.e. unaffordable to many. For a twenty years old Toyota Corolla, for example, you pay 12,500 euro.

The solution is simple: import spare parts, from China for example, and assemble them in a factory with relatively cheap labour. Although a simple strategy, it’s quite unique on the African continent. Various investors in Ethiopia saw the opportunity and grabbed it, Holland Car, a Dutch-funded company, being the first.

A model by the Pioneering car assembly in Ethiopia- Holland car plc

Sishah Yohannes, a forty-year-old captain at Ethiopian Airlines, drives his Ethiopian-assembled Holland Car Awash for a month now. “I’m really proud when I see the name written in Amharic on the back,” he says while parking at the Bole Medhane Alem Church. “This is what I’ve been waiting for: a good Ethiopian product after all this talk about economic growth.”

Holland Car’s general manager, Tadesse Tessema, convinced the Ethiopian government to lower import taxes on spare parts, making the business even more attractive. Shortly after, he presented three models, all named after Ethiopian rivers: Abay, Tekeze and Awash. Recently they launched a new family car: Shebele.

Other car assemblers followed suit. First there was competition from Holland Car’s former Chinese partner. Yangfan Motors launched three models of its Lifan Cars in Ethiopia. One of them shows resemblance to Holland Car’s Abay. The two companies split after a dispute and used to produce the model together.

A nice spectacle in the streets of Addis is Lifan’s Mini-Cooper look-a-like, the Lifan 320. The company prefers to describe it in masculine terms as a “mini-SUV with the power of a bear”, but it’s a “typical lady’s car”, according to car salesman Thomas Mulune.

The latest competitor for the passenger’s car market is Hyundai. The South Korean company enters Ethiopia with heavy artillery, Haile Gebreselassie being its ambassador, investor and sole importer. The assembly plant is under construction and personnel are to be trained to assure “international standards”, the successful athlete said.

A model recently assembled by BH Trading and Manufacturing Plc

Satisfied with the competition in the market he initiated, Holland Car CEO Tadesse is preparing for a new step. He’s building a gigantic plant that will be finished in two months. From that day, he will slowly reduce the import of parts and work towards producing full Ethiopian cars.

“As a pilot, I’m can choose between different cars from all over the world,” Sisha says. “But I prefer to encourage guys like Tadesse and Haile by buying Ethiopian ones. If the quality is there, of course.”

Ethiopian Torontonians Gearing Up For 12th Ethiopian Day Celebration

2010-09-07T02:15:00.001-07:00

Published by News Room September 7th, 2010 in Events and Featured. 0 Comments

Above: 12th annual Ethiopian Day Celebration, hosted by the
Ethiopian Association in the GTA- scheduled for this weekend.

Tadias Magazine
Events News

Published: Tuesday, September 7, 2010

New York (Tadias) – Ethiopian Torontonians are gearing up for their city’s 12th annual Ethiopian-Canadian Day Celebration, scheduled to take place this coming weekend at Christie Pits Park in Toronto.

The day long event features a variety of booths, arts, crafts, food and live entertainment – including Ethiopian music, reggae and other African grooves, organizers announced.

The yearly festivities, which also serve as a celebration of enqutatash (New Year) for the estimated 50,000 Ethiopians in the Greater Toronto Area, is organized by The Ethiopian Association in the GTA and Surrounding Regions. “It is with sense of obligation to preserve and promote our heritage that the Ethiopian Community in Toronto has taken over the task of organizing such an event,” the organization noted on its website following last year’s activities. “As in the past, our Association took charge of planning, budgeting and coordination of tasks.”

“In no other festivity do local Ethiopians’ spirit, talent and culinary skills shine as they do on the annual day-long Ethiopian New Year’s celebration,” wrote Yeamrot Taddese, Tadias Magazine’s contributing reporter from Toronto, in her recent series of articles about the city’s Ethiopian soccer team Ethio Star’s pending bid to host the 2011 tournament hosted by the Ethiopian Sports Federation in North America (ESFNA).

“The event, also dubbed ‘Ethiopian Day,’ is the most anticipated gathering in the community that features live music, rising Ethiopian entrepreneurs, social justice advocates and lots of injera.”

If You Go:
12th annual Ethiopian-Canadian Day Celebration
Saturday, September 11, 2010
10am to 11pm
at Christie Pits Park
Learn more at Ethiocommun.org
–

IMF Welcomes Devalued Birr

2010-09-07T02:14:00.000-07:00

Sukhwinder Singh, IMF representative in Ethiopia.

The International Monetary Fund (IMF) has welcomed last week’s move by Ethiopia’s central bank to devalue the Birr by 16.7pc on Wednesday, September 1, 2010.

The Birr was quoted at a weighted average of 16.3514 against the dollar compared with 13.6284 on Tuesday, August 31, by the National Bank of Ethiopia (NBE). The new rate was confirmed by an NBE official who was not authorised to make further comments.

The IMF welcomes this move given that it will help bolster Ethiopia's competitiveness, Sukhwinder Singh, IMF representative in Ethiopia, told Reuters.

“It will need to be supported by an appropriate monetary policy,” said Singh.

An ambitious five-year economic plan, which aims to achieve average annual economic growth of 14.9pc over the period and to end the Horn of Africa nation's dependence on food aid, was unveiled by the government last month.

Ethiopia is Africa's biggest coffee exporter and the world's fourth largest exporter of sesame. With a population of 80 million, it is also one of Africa's biggest potential markets and most of its people have no telephones or bank accounts.

The devaluation is the country’s fourth since January 2009. Devaluations can spur economic growth and reduce current account deficits to the extent that they boost exports and discourage imports, although they carry the risk of importing inflation.

“I think it is related to the new five-year plan and a strategy of export promotion and import substitution,” Tewodros Mekonnen, an economist with the Ethiopian Economics Association (EEA), a local think-tank, told Reuters. “There is a risk that it could cause inflation but it will probably also boost foreign direct investment and remittances.”

Inflation hit a high of 64.2pc in July 2008. After the peak, the country's central bank instructed private banks to restrict borrowing, the government halted state borrowing and increased bank reserves to drive the rate down. It slowed to 5.7pc in July 2010.

“Years of high inflation have eroded the country's export competitiveness, and the government has continually favoured sharp currency depreciations to counteract this,” Joseph Lake, an analyst at the Economist Intelligence Unit (EIU), told Reuters. “Although inflation has eased in recent months, this pattern of currency depreciation is likely to continue. Low levels of foreign exchange reserves, and twin fiscal and current-account deficits, will continue to put pressure on the Birr.”

Ethiopia, one of the world's biggest recipients of foreign aid, is keen to attract foreign investment in agriculture and mineral exploration. The country has operated a managed floating exchange rate regime since 1992.

"Famine-ridden Ethiopia": the source of fresh and shiny produce

2010-08-24T04:33:00.000-07:00

Posted by Newslive East Africa, Featured, Special Report 3 Aug 19, 2010

Buzz

Visit a supermarket in Abu Dhabi and you’ll be greeted by row after row of picture-perfect produce, most of it imported. The Indian subcontinent has long supplied food to the wealthy desert capital. These days, though, it’s likely those rows of shiny vegetables and fruit came from an improbable source: Ethiopia, a country practically synonymous with famine. Yes, Africa, where one in three people is malnourished, is now growing tomatoes and butter lettuce for export.
Ethiopia’s biggest greenhouse farming operation is kept hidden from curious, or hungry, eyes; even in Awassa, the southern city where it’s housed, few know it exists. Two kilometres down a dusty private road, past a checkpoint guarded with AK47s, hundreds of pristine, white greenhouses suddenly appear, alien to the setting. Farming in Ethiopia is still done by sickle and ox-driven plough. But inside Awassa’s cool, humidity-controlled greenhouses, vines are fed by a computerized irrigation system, the latest Dutch agricultural technology.
Every day, a workforce of 1,000 locals pick, pack and load hundreds of tons of fresh produce onto waiting trucks, including 30 tons of tomatoes alone. After reaching the capital, Addis Ababa, the produce is flown to a handful of Middle Eastern cities, entirely bypassing Ethiopia, one of the hungriest places on the planet. The trip from vine to store shelf takes less than 24 hours. It’s the latest project by Saudi oil and mining billionaire, Sheikh Mohammed Al Amoudi. And it may be the future of farming.
Over the past 18 months, plantations like this one have been sprouting across Africa. Middle Eastern countries like Saudi Arabia—rich in oil, but water-poor—as well as those dependent on imports like South Korea and Japan, and rising powers like China and India, have begun leasing vast tracts of land in Africa, outsourcing food production to the continent. Agribusiness and Western hedge funds are funnelling billions into the new projects, banking on future scarcity.
The controversial trend has been dubbed “outsourcing’s third wave”—following manufacturing and information technology (IT) in the ’80s and ’90s. The high cost of installing irrigation systems, and importing fertilizers, combines and tractors is no deterrent. Defenders of the new projects say they’re bringing desperately needed new technologies, seeds and investment to Africa. But opponents see the trend as a “land grab” that is forcing poor farmers off their land, and benefiting only the governments inking the deals.
Already, commercial farms dot the northbound highway to Addis Ababa. In the evenings, a steady stream of trucks loaded with fat, sumptuous berries and cherry-red tomatoes rumble past, rushing to Bole International Airport and Gulf state grocery stores beyond. The highway’s dusty shoulders, meanwhile, are littered with the carcasses of animals dead from starvation and disease, the bones bleached white from the sun. The contrast is grim, even by local standards.
The new scramble for Africa was triggered by a convergence of events: surging demand for biofuels, rising consumption patterns in China and India and the 2008 global food crisis, when the price of corn and wheat tripled, almost overnight. Responding to sudden hyperinflation, rioting and panic buying, at least 30 countries, including Argentina, Vietnam, Brazil, Cambodia and India, banned or sharply reduced food exports. In short order, Japan and South Korea, who import 70 per cent of their grains, joined a parade of countries turning to Africa to lock in means of production beyond their borders.
The scale of the effort is astonishing. More than 125 million acres—an area roughly equal in size to Sweden—has been or is being negotiated for lease or sale in poorer countries, mostly in Africa, according to a recent estimate. In Sudan alone, the U.A.E. and South Korea have leased one and two million acres respectively, for crops including corn, alfalfa, potatoes and beans; Egypt has enough land there to grow two million tons of wheat annually, and Saudi Arabia and Jordan have leased 25,000 and 60,000 acres each, mainly to grow wheat and corn. In February, the U.S. investment firm BlackRock launched a world agriculture fund, earmarking US$30 million for farmland acquisitions; Goldman Sachs and Morgan Stanley already offer investors access to similar funds. Calgary’s Agcapita, a three-year-old firm focused exclusively on farmland investment, says private equity firms have lined up some US$3 billion for farmland in developing countries.
Mostly, the deals fly under the radar. Sometimes, their size or sheer audacity triggers attention—like former AIG trader Philippe Heilberg’s deal to lease one million acres in Darfur. When it emerged that Daewoo, the South Korean giant, had signed a 99-year lease granting it close to half of Madagascar’s arable land, protests broke out in Antananarivo, the country’s capital, eventually sinking both the deal, and the president.
Why Africa? Not only is land roughly one-tenth the price of land in Asia, it’s likely the “final frontier,” says Paul Christie, marketing director at Emergent Asset, a London investment firm investing several hundred million dollars in commercial farms in Africa. Some 90 per cent of the world’s arable land is thought to be in use. Also, as Heilberg told the German magazine Der Spiegel after closing the deal in Darfur, “When food becomes scarce, the investor needs a weak state that does not force him to abide by any rules.” Sudan, a dictatorship ranked among the five most corrupt countries on the planet, certainly qualifies. Heilberg’s deal was approved by the deputy commander of Sudan’s People’s Liberation Army (SPLA), the official army of semi-autonomous southern Sudan. “This is Africa,” he recently told Rolling Stone. “The whole place is like one big mafia. I’m like a mafia head. That’s the way it works.”
He’s now looking to double his Sudanese holdings. In so doing, he’ll also gain access to hundreds of million of gallons of scarce water resources—the hidden impulse behind this new play on Africa, says Michael Taylor, with the Rome-based International Land Coalition. “Saudi Arabia has no shortage of land.
Its interest in Africa,” he says, “is water.” What we tend to think of as a dry continent actually has more water resources per capita than Europe, and drought-ridden countries from the Persian Gulf to Asia want in. In places, Taylor warns, investors are walking away with two-page contracts covering 99-year leases. No matter what the harm—over-consumption of water, over-fertilization, deforestation—“governments will be powerless to make changes.” South Korea’s Sudanese plantation will draw from the Nile, threatening Egypt’s food security downstream. Already experts warn of a brewing conflict between the nine Nile states—including favourite destinations for foreign farms: Sudan, Ethiopia, Tanzania and Kenya. Can the region shoulder the added water strain?
But the land deals also offer a chance to reverse decades of under-investment in Africa—which was bypassed by the Green Revolution that, in the ’60s and ’70s, transformed India and China. In much of the poor world, “land is not primal forest,” says Oxford economist Paul Collier; “it is just badly farmed.”
Collier, among the best-known voices on global poverty, argues that the West’s “love affair with peasant agriculture” is clouding the development debate on Africa. “Our peasantry vanished for a simple reason—it was inefficient,” says the author of The Bottom Billion, pointing to emerging market successes like Brazil, where large-scale industrial farms have replaced small holdings. “Commercial farms innovate,” he writes, “because scale helps to overcome the impediments faced by the small.” Some African intellectuals bridle at Western criticism of the play on Africa. “They’re here because we want them here,” says Teshome Gabre-Mariam, one of Ethiopia’s top lawyers. “We can’t ignore the development potential of this venture. We have everything to gain, nothing to lose.”
These days the severity of the food crisis has eased, but not forever. By 2050, when the global population tips nine billion, demand for food will have risen by as much as 70 per cent, according to the UN Food and Agriculture Organization. Food commodity prices continue to climb alongside rising energy prices and desertification is accelerating from Australia to China to Spain; the rising temperatures are predicted to slash yields. In places, that’s already begun. Like it or not, hungry eyes will increasingly zero in on Africa. The world, it seems, may come to depend on it.

Explore Ethiopia for its ancient culture

2010-08-18T07:11:00.000-07:00

By MALCOLM CAIN JR.

Philadelphia Daily News

For the Daily News

Ethiopia is the cradle of civilization, the place where some believe the biblical Ark of the Covenant is held. Its historical landmarks and rich culture tell the story of a people who have survived more than a thousand years of outsiders' attempts to exert influence.

Ethiopia also is home to more than 80 ethnic groups, a country with a growing economy and a modern infrastructure.

So how is this land seen through a modern American traveler's eyes? Certainly a visitor must be open-minded to have a meaningful experience here.

I went to Ethiopia in May for a month as a volunteer with Projects Abroad for my senior class project at the Haverford School. I worked as a journalist in the capital city of Addis Ababa, writing articles about Ethiopian culture for a local newspaper.

I tried to absorb as much of the culture as I could, touring Addis Ababa as well as many historic small towns such as Lalibela, named after the king who built the city about 1,000 years ago. It's one of the holiest cities for Ethiopian Orthodox Christians.

The scenery took me by surprise - and not just for its beauty.

Evidence of "Obamamania" was everywhere, in tourist shops selling T-shirts with President Obama's image on them, and among the town's youth, who eagerly inquired, "Are you American?" then responded, "Yes we can!"

Along with the obvious modern influences, the rich history of the community was vividly present. There were more than 13 churches in Lalibela, monolithic structures cut out of rock. These are active houses of worship, not just historic monuments, and the air of devotion when you walk inside is palpable. Throughout Ethiopia, people hold tradition and faith close. Maybe that is one reason for the country's resilience.

There is much to see in Addis Ababa.

The Ethiopian National Museum has the 3.5 million-year-old skeleton of Lucy, the oldest hominid ever found. Though her bones are kept out of view for preservation, there are replicas on display. The museum has many artifacts of Ethiopian history dating from ancient times to today.

Be sure to stop by Addis Ababa University library, once the palace of Emperor Haile Selassie. Some of the family rooms are on display there.

A visitor's open-mindedness might be tested at mealtimes in Ethiopia, since the custom here is to eat with your fingers. Family and friends gather around a big table of assorted dishes, many of them stews spiced with a pepper seasoning called berbere, on a pancake type bread called injera.

There are Ethiopian restaurants in the Philadelphia area, but nothing compares to the wholesome quality and quantity of dining this way in Ethiopia.

When it comes to transportation around Addis Ababa, it's best to catch one of the small blue minibuses. For as little as 7 U.S. cents, you can ride these sometimes uncomfortable buses all over the bustling city. It's a great way to experience everyday life there.

I saw many examples of the modern influences of clothes, music and culture thriving in Addis Ababa, especially in places like Bole, a growing middle- and upper-class neighborhood by Bole International Airport. Many young girls and boys walking about the streets were dressed in the kind of hip-hop garb you'd see around Philly. During one bus ride, I heard a remix of a Jay-Z song, sung in the official Ethiopian language, Amharic.

But I was also impressed by Ethiopians' sense of traditional wear. As I boarded Ethiopian Airlines in Washington, D.C., at the start of my trip, many older Ethiopian women were dressed in the traditional white garment called a shama that covers the head and shoulders and sometimes most of the face.

Poverty is another aspect of Ethiopian life that leaves an indelible impact on a visitor. I will never forget seeing a woman who appeared to be in her early 20s, barefoot and dressed in rags, with a baby in her arms, begging for money.

Malcolm Cain, of Mount Airy, will attend St. John's University in New York City this fall. He will major in international studies.

Explore Ethiopia for its ancient culture By MALCOLM CAIN JR. Philadelphia Daily News For the Daily News Ethiopia is the cradle of civilization, the place where some believe the biblical Ark of the Covenant is held. Its historical landmarks and rich culture tell the story of a people who have survived more than a thousand years of outsiders' attempts to exert influence. Ethiopia also is home to more than 80 ethnic groups, a country with a growing economy and a modern infrastructure. So how is this land seen through a modern American traveler's eyes? Certainly a visitor must be open-minded to have a meaningful experience here. I went to Ethiopia in May for a month as a volunteer with Projects Abroad for my senior class project at the Haverford School. I worked as a journalist in the capital city of Addis Ababa, writing articles about Ethiopian culture for a local newspaper. I tried to absorb as much of the culture as I could, touring Addis Ababa as well as many historic small towns such as Lalibela, named after the king who built the city about 1,000 years ago. It's one of the holiest cities for Ethiopian Orthodox Christians. The scenery took me by surprise - and not just for its beauty. Evidence of "Obamamania" was everywhere, in tourist shops selling T-shirts with President Obama's image on them, and among the town's youth, who eagerly inquired, "Are you American?" then responded, "Yes we can!" Along with the obvious modern influences, the rich history of the community was vividly present. There were more than 13 churches in Lalibela, monolithic structures cut out of rock. These are active houses of worship, not just historic monuments, and the air of devotion when you walk inside is palpable. Throughout Ethiopia, people hold tradition and faith close. Maybe that is one reason for the country's resilience. There is much to see in Addis Ababa. The Ethiopian National Museum has the 3.5 million-year-old skeleton of Lucy, the oldest hominid ever found. Though her bones are kept out of view for preservation, there are replicas on display. The museum has many artifacts of Ethiopian history dating from ancient times to today. Be sure to stop by Addis Ababa University library, once the palace of Emperor Haile Selassie. Some of the family rooms are on display there. A visitor's open-mindedness might be tested at mealtimes in Ethiopia, since the custom here is to eat with your fingers. Family and friends gather around a big table of assorted dishes, many of them stews spiced with a pepper seasoning called berbere, on a pancake type bread called injera. There are Ethiopian restaurants in the Philadelphia area, but nothing compares to the wholesome quality and quantity of dining this way in Ethiopia. When it comes to transportation around Addis Ababa, it's best to catch one of the small blue minibuses. For as little as 7 U.S. cents, you can ride these sometimes uncomfortable buses all over the bustling city. It's a great way to experience everyday life there. I saw many examples of the modern influences of clothes, music and culture thriving in Addis Ababa, especially in places like Bole, a growing middle- and upper-class neighborhood by Bole International Airport. Many young girls and boys walking about the streets were dressed in the kind of hip-hop garb you'd see around Philly. During one bus ride, I heard a remix of a Jay-Z song, sung in the official Ethiopian language, Amharic. But I was also impressed by Ethiopians' sense of traditional wear. As I boarded Ethiopian Airlines in Washington, D.C., at the start of my trip, many older Ethiopian women were dressed in the traditional white garment called a shama that covers the head and shoulders and sometimes most of the face. Poverty is another aspect of Ethiopian life that leaves an indelible impact on a visitor. I will never forget seeing a woman who appeared to be in her early 20s, barefoot and dressed in rags, with a baby in her arms, begging for money. Malcolm Cain, of Mount Airy, will attend St. John's University in New York City this fall. He will major in international studies. Read more: http://www.philly.com/dailynews/features/20100818_Explore_Ethiopia_for_its_ancient_culture.html#ixzz0wxyktLB8 Watch sports videos you won't find anywhere else

2010-08-18T07:08:00.001-07:00

No sign of finish line for Haile Gebrselassie

2010-08-16T02:08:00.000-07:00

Haile Gebrselassie, destroyer of athletics records in one half of his life and employer of more than 500 people in a burgeoning business empire in the other, is sitting behind his desk in downtown Addis Ababa shaking with laughter.

By Simon Hart
Published: 3:25PM GMT 20 Dec 2008

On top of the world: Haile Gebrselassie is thinking about running the marathon at London 2012 - despite being aged 39 then Photo: ACTION IMAGES

He has been asked for the secret of a running career that has brought him 26 world records, including his latest milestone in becoming the first man to break the two hours, four minutes barrier for the marathon, and he is recalling an incident when he and his Ethiopian team-mates had an overnight stopover in London en route to America.

"We had to stay in the Sheraton next to Heathrow but when we arrived it was about 11 o'clock in the evening and the middle of the winter. It was impossible to train outside.

"I started to think about how I could train and then I noticed that my hotel corridor was very long. I put on my shoes and started to run up and down it, and then some of my friends joined me.

"By that time it was close to midnight and people started to come out of their rooms to look at us. Do you know what happened? They all thought it was an emergency and started following us. One old woman was shouting and running down the corridor in her pyjamas."

The memory brings forth a loud guffaw before Gebrselassie's eyes narrow and he gets to the moral of his story.

"The reason I'm telling you this is that I didn't want to miss a day's training. I always tell young athletes the same thing, 'Wherever you go, whatever you do, what must your top priority be? Running'.

"In my life I do a lot of things but I never forget my training. Athletics is in my blood. The top priority must always be training, training. This is a discipline. You have to do it."

It is a philosophy that defines the 5ft 5in African who, like Usain Bolt in Beijing, took athletics into a new age of boundless possibility by winning the Berlin Marathon in September in 2hrs 3min 59sec –27 seconds inside his own previous world record.

What is all more remarkable is that he achieved it at the age of 35 while juggling athletics with his competing life as the owner of a growing property development company with assets that include commercial buildings across Ethiopia, a cinema, a soon-to-be-opened 120-bedroom hotel (he's toying with the idea of naming it 'Haile Hotel' to make it easy to find on the internet) and plans to build a complex of upmarket apartments and villas.

Oh, and he has also just a signed an exclusive deal to import Hyundai vehicles into Ethiopia. He already sells Isuzu trucks.

How does he do it? That word discipline. His daily routine begins with a 5.30am run of anything up to 30km on the high-altitude trails above Addis Ababa followed by a full day's work at the office, then another training session before returning home at 8pm just in time, if he is lucky, to kiss his four young children goodnight.

It is a treadmill that never stops. His only concession to rest is that on Sundays he has one training session, not two.

"Sometimes my life looks as if it's too much," he admits. "You're training in the morning, going to your office and doing a lot of work. It looks too much, but I've no choice and I accept that. Running is always my top priority. I'm a runner first before anything else. Everything that I have now is because of running."

We are now sitting in the garden of his home in Addis, where the fruits of his labour are manifest in a three-storey mansion built four years ago in mock-Palladian style that would be the envy of many a Premiership footballer. On one side is the family swimming pool, on the other a panoramic view of the city.

Inside, there are two giant, floor-to-ceiling glass cabinets stuffed with hundreds of medals and trophies from a 16-year international career – so many that his wife, Alem, has had to devise a complex indexing system just to keep track of them.

The only ones missing are the Olympic 10,000 metres gold medals he won in Atlanta and Sydney. He gave them to his local church to display in its museum.

He is immensely wealthy by Ethiopian standards, a fact brought home by the humble shacks just a stroll from his house, but he has made it a point of principle to invest his money in his home country.

"Why am I investing all my money here? Because this is my home town," he says. "Of course I have the opportunity to invest my money in Europe or America or wherever, but why not here?"

Not everything he does is motivated by profit. He has built and runs two schools attended by around 2,000 pupils. One of them is in his birthplace of Assela, in southern Ethiopia, where his life of running began, pounding out the 10km from home to school and the 10km back again with a stack of books wedged under his arm.

His passion for education extends to sport and he is currently mentoring 14 young athletes from developing countries as part of a project called G4S 4teen organised by the G4S security company. One of them, 20-year-old Kenyan runner Pauline Korikwiang, was in town last week to learn from the master.

As for his own racing plans, he will be competing next month in the Dubai Marathon, a race he won last year and which could do wonders for his cash flow. A world record will earn a $1 million bonus and Gebrselassie has every intention of going after it.

While he puts his own physical limit at around two hours, three minutes, he is in no doubt that the ultimate barrier, a marathon in under two hours, will one day be breached.

"Believe me, in the future someone will run under two hours. This is not just about the strength of the athlete but the technology.

"When Abebe Bikila won in Rome in 1960, he won in two hours, 15 minutes and something, and that was a world record. After 48 years, Haile Gebrselassie runs more than 10 minutes faster, but what do you expect after 48 years? I believe that in just 20 years' time someone will run under two hours."

The one blot, or rather three blots, on his marathon record are his three defeats in London, including the 2007 race when he pulled out after 18 miles with breathing difficulties.

His doctor put it down to hay fever, which means London in pollen-heavy April is now off limits, though there is one race in the capital that is definitely in his sights.

"The marathon in 2012 will be in August, which will be perfect for me," he says.

He will be 39 by then, but you wouldn't put it past him adding another Olympic gold medal to the display in his church museum. Haile Gebrselassie has no intention of slowing down.

Tool-making and meat-eating began 3.5 million years ago

2010-08-13T05:21:00.000-07:00

By Jason PalmerScience and technology reporter, BBC News

The bones belonged to a goat-sized and a cow-sized animal

Researchers have found evidence that hominins - early human ancestors - used stone tools to cleave meat from animal bones more than 3.2 million years ago.

That pushes back the earliest known tool use and meat-eating in such hominins by more than 800,000 years.

Bones found in Ethiopia show cuts from stone and indications that the bones were forcibly broken to remove marrow.

The research, in the journal Nature, challenges several notions about our ancestors' behaviour.

Previously the oldest-known use of stone tools came from the nearby Gona region of Ethiopia, dating back to about 2.5 million years ago. That suggests that it was our more direct ancestors, members of our own genus Homo, that were the first to use tools.

But the marked bones were found in the Dikika region, with their age determined by dating the nearby volcanic rock - to between 3.2 million and 3.4 million years ago.

A battery of tests showed that the cuts, scrapes and scratches were made before the bones fossilised, and detailed analysis even showed that there were bits of stone lodged in one of the cuts.

In Lucy's hands

The only hominin species known from the Dikika region at that time wasAustralopithecus afarensis, the species represented by the famed "Lucy" fossil, and one that is hypothesised to be a direct ancestor of Homo and therefore of us.

But Lucy and her contemporaries were thought to be vegetarians, and many had assumed that tool use arose only in later, Homo species.

Study co-author Zeresenay Alemseged, the palaeoanthropologist from the California Academy of Sciences in San Francisco who leads a large research effort in the region, said that the find overturns much of what was thought about A. afarensis.

"For 30 years, no-one has been able to put stone tools in their hands, and we've done that for the first time," he told BBC News.

"We are showing for the first time that stone tool use is not unique to Homo or Homo-related species - we have A. afarensisnow behaving like Homo in a way both by using tools and eating meat. It's another attribute that could enable us to link A. afarensis to the genusHomo."

The conclusions, however, are based on a small number of bones, and the inference of stone tool use is made indirectly: no tools were actually found at the site. That means it remains unclear if A. afarensis actually made the tools from larger bits of stone, or simply used sharpened fragments that were found.

'Big story'

Both Alemseged and Shannon McPherron, an archaeologist from the Max Planck Institute of Evolutionary Anthropology in Leipzig, Germany, and lead author of the study, say that the next task is to return to the region and keep looking for evidence to tie up the story.

They hope to establish that it was in fact A. afarensis that used the tools, rather than any other species that has not yet been found in the region.

"It's always hard to associate a behaviour with a particular hominin," Dr McPherron explained to BBC News.

"We're never so lucky as to find a hominin dead with the archaeology in its hand."

Analysis showed the cuts were definitely made by stone, not scavengers

But more than that, the team want to look for tools and any potential evidence of their manufacture, to find what kind of tools the A. afarensis butcher actually had.

The previous record-holders for oldest stone tools seemed relatively advanced, Dr McPherron explained, so experts have guessed for some time that less sophisticated tools would be found.

"What we can now think about is a fairly extended period of time when these hominins were experimenting with stone, perhaps using naturally occurring flakes," he said.

"But at some point they would've started to make their own. What we need to do is fill in that time period."

Chris Stringer of the Natural History Museum in London cautions against making firm conclusions about the development of tool use, given the limited number of artifacts from the current find.

"We have to be cautious that these are just a couple of bones with what seem to be cut marks on them; one would like to have stone tools associated with them to really clinch the case," he told BBC News.

However, he agrees that pushing the first known date of tool use back by nearly a million years is, regardless, "a big story".

"It suggests that meat-eating and butchery behaviour is pre-human - it's an ancestral behaviour and as such it gives an interesting perspective on the Australopithecines that we didn't have before," he said.

"They seemed to be vegetarian and lacking significant aspects of human behaviour, and in a sense this would bring them somewhat closer to us."

Africa 'witnessing birth of a new ocean'

2010-08-10T08:52:00.000-07:00

A 60km crack opened in Ethiopia in 2005 and has been expanding ever since

Africa is witnessing the birth of a new ocean, according to scientists at the Royal Society.

Geologists working in the remote Afar region of Ethiopia say the ocean will eventually split the African continent in two, though it will take about 10 million years.

Lead researcher Tim Wright who is presenting the research at the Royal Society's Summer Exhibition, described the events as "truly incredible".

Used to understanding changes in the planet on timescales of millions of years, the international team of scientists including Dr Wright have seen amazing changes in Afar in the past five years, where the continent is cracking open, quite literally underneath their feet.

In 2005, a 60km long stretch of the earth opened up to a width of eight metres over a period of just ten days.

Hot, molten rock from deep within the Earth is trickling to the surface and creating the split.

Underground eruptions are still continuing and, ultimately, the horn of Africa will fall away and a new ocean will form.

'A smaller Africa'

Dr James Hammond, a seismologist from the University of Bristol - who has been working in Afar - says that parts of the region are below sea level and the ocean is only cut off by about a 20-metre block of land in Eritrea.

"Eventually this will drift apart," he told the BBC World Service. "The sea will flood in and will start to create this new ocean.

"It will pull apart, sink down deeper and deeper and eventually... parts of southern Ethiopia, Somalia will drift off, create a new island, and we'll have a smaller Africa and a very big island that floats out into the Indian Ocean."

The researchers say that they are extremely lucky to be able to witness the birth of this ocean as the process is normally hidden beneath the seas.

The team hope to conduct experiments in the area that will help understand how the surface of the Earth is shaped.

They believe that the information they glean from observing the shaping of the Earth will help scientists better understand natural hazards such as earthquakes and volcanic eruptions.