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  • Ethiopian moves into Terminal 2 at London Heathrow

    Ethiopian Airlines, the first carrier to debut the advanced Boeing 787 Dreamliner to London Heathrow, has moved to its new UK home at Terminal 2: The Queen’s Terminal.

    It will join a host of Star Alliance members at the brand new £2.5 billion state-of-the-art terminal formally opened by Her Majesty the Queen in June.

    Ethiopian operates non-stop daily flights to Addis Ababa from London Heathrow with connections to 49 destinations on the African continent and 18 destinations within Ethiopia.

    It currently operates to 83 destinations around the world.

    From the end of October, all of the Star Alliance member airlines will be handled in one place enabling Ethiopian passengers to enjoy quick and smooth connections between member airlines.

    Ethiopian Airlines’ passengers will enjoy Terminal 2’s state of the art technology featuring efficient and speedy ARINC ‘common use’ check in kiosks, supplied by Rockwell Collins, with facilities to print your own baggage tags.

    Passengers will benefit from reduced queuing and therefore more time airside where they can enjoy shopping.

    “We are delighted to be joining fellow Star Alliance members at The Queen’s Terminal,” said Michael Yared, area manager - UK and Ireland, Ethiopian Airlines.

    “The new terminal offers our passengers cutting-edge technology, an efficient and excellent design and some attractive shopping options that will enhance their journey and all-round travel experience.”

    Ethiopian passengers will check-in at Zone D in the new terminal.

    Source: WIC

    Ethiopian moves into Terminal 2 at London Heathrow - Ethiopian Embassy UK VIDEO


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  • Garment-making finds new low-cost home in Ethiopia

    ADDIS ABABA - (Reuters) As basic wages soar in China, low-end manufacturing is starting to shift to cheaper locations around the world, and frontier African nations such as Ethiopia are positioning themselves to reap the benefits.

    With rock-bottom wages, cheap and stable electricity and improving transport infrastructure, the continent’s most populous nation after Nigeria is building a reputation for producing clothes, shoes and other basic goods.

    The sector is still in its infancy in what was for decades a Communist-run economic backwater. Bureaucracy and poor transport links mean business costs aren’t quite as low as they might be.

    But state investment in factory zones and the arrival of firms from Turkey, India, the Gulf and China suggest industrialization is finally taking root in the east African giant, where many still rely on subsistence agriculture.

    “We have to move because of manufacturing’s development in China, due to the high increase in wages and in raw materials,” said Nara Zhou, spokeswoman for Huajian, a Chinese company that makes over 300,000 pairs of boots and sandals a month for retailers such as Guess from a factory near the capital.

    “Ethiopia enjoys stability, the government is eager to industrialize and there is also the low labor cost here – a tenth compared to China,” she added.


    For years, investors gave Ethiopia a wide berth, wary of the heavy role played in the economy by a government that shuns the liberalization seen in other African nations and which has retained its monopoly on telecommunications and bar on foreigners in the financial sector.

    However, in the last few years the commercial logic of factory production has started to outweigh those concerns, and the wider effects are dramatic.

    The government is projecting gross domestic product (GDP) growth at 11 per cent a year, and even though the International Monetary Fund is more sober its 8.5 per cent forecast for this year indicates Ethiopia is one of Africa’s – and the world’s – fastest-growing economies.

    Despite the government’s socialist roots, there is no minimum wage, letting firms such as Huajian pay salaries of $50-$70 a month – still higher than the average per capita income.

    “Almost every young person in this locality now works here,” said Desta, one of 7,500 employees at Ayka Addis Textile and Investment Group, a Turkish-owned factory 20 km (13 miles) west of the capital.

    “We all struggled to make ends meet beforehand. We can now afford proper healthcare or sending a child to school,” Desta, who did not give his surname, added.


    With 90 million people already and annual population growth forecast to exceed 2 per cent until 2030, the government is desperate to attract labor-intensive investment and jobs.

    To this end, it says it has introduced incentives such as tax holidays and subsidized loans to investors with interest rates as low as 8 per cent – below even the 9.75 per cent benchmark rate in South Africa, the continent’s most developed economy.

    Ethiopia is also investing heavily in hydropower to boost the scope of a grid that offers electricity at 5 U.S. cents per kilowatt hour, compared with 24 cents in neighboring Kenya.

    “The availability of power and the cost is cheaper than any other country in the world. We are providing power, land and labour all very cheaply,” said trade and industry minister Tadesse Haile, who wants Ethiopia to export $1.5-billion of textiles a year in five years, from just $100-million now.

    Other east African nations such as Kenya and Uganda are also chasing textiles investment but cannot compete on input costs against Ethiopia, where wages are 60 per cent lower than the regional average, said Jaswinder Bedi, Kenya-based chairman of the 27-nation African Cotton and Textile Industries Federation.

    “Ethiopia is a new player,” Bedi said. “They are growing and they are growing rapidly.”


    Even so, bureaucracy and transport impose a major cost on companies, leaving Ethiopia languishing at 141 in a World Bank global trade logistics index published last year.

    Importing or exporting a container takes on average 44 days, compared to 26 for Rwanda, another landlocked East African nation.

    “Our logistics costs are second to input,” Ayka Addis chief executive Amare Teklemariam told Reuters. “It affects the competitiveness of the company.”

    To this end, the government says it is pouring funds equivalent to two thirds of GDP into new infrastructure every year, expanding the road network to 136,000 km by next year, from just 50,000 km in 2010.

    It also has grand plans to build 5,000 km of railway lines by 2020 from less than 800 km at the moment.

    “Infrastructure development is something Ethiopia is working seriously on,” Tadesse said.

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  • Swedfund joins H&M in Ethiopia expansion

    As H&M expands into Ethiopia, Sweden's state venture capital unit Swedfund has announced that it will back the clothing giant, in a move hoped to create more jobs for local women.

    The partnership, which is set to kick off in autumn this year, will see Swedfund injecting 60 million kronor ($8.6 million) in investments to H&M suppliers, reported the Dagens Industri newspaper. 
    The goal is to create a domestic textile industry that's both sustainable and responsible, Swedfund announced in a statement.
    "Through this unique partnership with H&M, our goal is to contribute to developing the textile industry in Ethiopia, thus creating jobs with good working conditions that lift people out of poverty, especially women," said Anna Ryott, CEO at Swedfund. 
    H&M's CEO Karl-Johan Persson said the move was an opportunity to get involved early in Ethiopia's growing textile industry. 
    "We have for many years worked in existing manufacturing countries to improve working conditions and environment. This experience is included with the establishment of cooperation with Ethiopian suppliers," he added.
    The Swedish clothing giant has been on the scene in Ethiopia all year, with long-term plans to attract Africa's middle class.
    H&M has a good track record when it comes to sustainability and working conditions.
    In May last year it signed up to a building safety agreement in the wake of the factory collapse that killed more than 1,000 garment workers in Bangladesh. In November it announced that it was scrapping angora products after a Chinese video surfaced showing workers plucking hair from rabbits while they were still alive.
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  • Ethiopian wine raises cheer for economy

    ZIWAY - Beyond the donkeys on a potholed road in southern Ethiopia is an unexpected sight—vineyards bursting with merlot, syrah and chardonnay grapes ripening in the African sun.

    The scene is more reminiscent of France's Beaujolais region than this corner of the Horn of the Africa, which for many still conjures images of famine, poverty and war.

    "People outside Ethiopia may know of the drought 10 years ago," Industry Minister Ahmed Abtew told AFP. "But when they see wine with 'Made in Ethiopia' on it, their mind automatically changes."

    The French beverage giant Castel, which bottled its first batch of Ethiopian wine this year, is helping change the way outsiders view the country. It is also boosting government hopes of attracting foreign investment, key to its plans to reach middle income status by 2025.

    The country's growth rates are already among the highest in Africa, hitting 11.2 percent last year according to the government, although the International Monetary Fund puts the figure at 8.2 percent.

    For Castel, the ambition is merely to produce good wine, and Ethiopia is an ideal—if surprising—place to do that.

    "We don't find it difficult because the climate is good, it's not too hot," said Castel's Ethiopia site manager Olivier Spillebout, at its vineyards in Ziway, 160 kilometers (100 miles) south of the capital Addis Ababa.

    The sandy soil, short rainy season, cheap land and abundant labour were what drew the company's billionaire president Pierre Castel. The company has been working in Africa for half a century, and in Ethiopia since 1998 when it purchased a state-owned brewery, St George.

    But the late prime minister Meles Zenawi thought a vineyard would boost Ethiopia's image abroad, and asked Castel if it would be interested. So in 2008 the firm spent $27 million (€20 million) setting up Ethiopia's first foreign-owned vineyard.

    Surprise hit in China

    Castel aims to sell half of this year's production of 1.2 million bottles on the domestic market, and half to Ethiopian diaspora communities in North America, Europe and elsewhere in eastern Africa.

    But Spillebout has been startled by some surprise customers, including a Chinese buyer who snapped up 24,000 bottles.

    "It's a big surprise," he said, standing amid rows of merlot vines.

    China, however, is home to the largest number of wine drinkers in the world, and in recent years Chinese investors have bought scores of French vineyards as they have become significant players in the wine world.

    In Ethiopia, a bottle of Castel wine sells for 10 dollars (€7), and is of better quality than comparably priced imported wines from South Africa or Italy.

    The bottle's design echoes Ethiopian traditions, showing the bulbous carafe traditionally used to serve the still popular, and potent, honey wine.

    Even so Spillebout claims his wines are popular with drinkers of sweet and syrupy traditional wines, which are often served with raw meat, a local delicacy.

    Goes well with raw meat

    Ethiopia is hoping to emulate the growth of Asian nations that have focused on manufacturing to develop rapidly.

    "Our vision is that Ethiopia will be a hub for labor-intensive, light industries in Africa," Abtew said.

    But exports have declined from $3.08 billion (€2.3 billion) in 2013 to $2.6 billion (€1.9 billion) in the past year, according to the trade ministry.

    Despite its eagerness to attract foreign investment, the country is still losing out to more established African markets like Kenya and Nigeria.

    The World Bank ranks Ethiopia 125th out of 189 on its Ease of Doing Business index, with bureaucracy, access to key infrastructure and investment protection rated poorly.

    For now, the country is considered a long-term investment destination. Although cheap labour drawn from its population of 91 million, ready access to publicly owned lands and tax breaks make it attractive, investors should not expect a quick return.

    Castel, for example, said it does not expect to earn profits from its Ethiopia vineyard until 2016, eight years after it set it up.

    France's ambassador to Ethiopia, Brigitte Collet, said "pioneers" like Castel could attract other investors.

    "This important investment is also a very strong statement of confidence in the future of Ethiopia," she said.

    French companies have earned contracts worth €3.0 billion ($4.0 billion) in the last five years with 50 companies operating in the country today, up from 15 only a decade ago.

    Castel's main concern is keeping up with demand, having sold nearly a quarter of its first batch of wine since April, and said it plans to expand the vineyard to eventually boost production to three million bottles a year.

    Though sales are modest today, Spillebout is not ruling out Ethiopia's potential to become a premier wine-producer and exporter in Africa.

    "Exports are small now, but year after year the sales will grow very quickly," he said. — AFP

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  • Out of Africa: The great money migration

    the great money migration out of Africa

    Bahar Dar, Ethiopia - The figures are staggering: At least $1.8 trillion illicitly flowed out of Africa between 1970 and 2009.

    This is far more than the external aid the continent received over the same period, and almost five times its current external debt. According to researchers, the continent also loses at least $100bn a year in this financial haemorrhage.

    African leaders convened this week in the Ethiopian city of Bahar Dar to discuss illicit financial flows and what can be done to staunch them. A study commissioned by the Tana High Level Forum on African Security, which organised the conference, found that illicit flows from Africa grew at an average rate of 12.1 percent per year since 1970, and that capital flight from West and Central African countries accounted for most of the illicit flows from sub-Saharan Africa.

    Illicit financial flows consist of money earned illegally and then transferred for use elsewhere. The money is usually generated from criminal activities, corruption, tax evasion, bribes and smuggling. Yet the numbers tell only part of the story - a story that exposes how these highly complex and deeply entrenched practises have flourished, with a devastating impact on Africans' efforts to extricate themselves from grinding poverty.

    This scourge eats into the gross domestic products of African countries, draining foreign exchange reserves, reducing tax collection and investment inflows and worsening poverty. 

    "The costs of this financial haemorrhage have been significant for African countries. It has heightened income inequality and jeopardised employment prospects. In the majority of countries in the continent, unemployment rates have remained exceedingly high in the absence of investment and industrial expansion," said Kenya's Central Bank Governor Dr Njuguna Ndungu.

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