AddisZefen - Ethiopian Video

Business & Money

  • KIA Motors signs agreement with Belayab Motors to set up car assembly plant

    Ethiopia’s vehicle assembly company Belayab Motors PLC has entered into an agreement with South Korean car manufacturer KIA Motors Corporation that will see the manufacturer assemble cars in Ethiopia even as it contemplates expanding such operations to the rest of Africa.

    "It is important to penetrate the African market. We are also looking at the prospects of opening similar plants in Algeria and other countries," Soon Nam Lee, President of Kia's Middle East and Africa said.

    Speaking at the agreement signing ceremony, Mr. Fekadu Girma, General Manager of Belayab Motors, expressed his excitement at the partnership. “Our company has been in the forefront building the automotive industry in Ethiopia since 2006. This agreement with Kia Motors is a testament to our unwavering efforts towards accelerating the growth of the local manufacturing industry.”

    Mr. Fekadu noted that Belayab’s commitment is evident to the success of the Ethiopia’s Growth and Transformation Plan (GTPII) by intensifying its investment and facilitate foreign direct investment (FDI) through its alliance with KIA Motors. “This potentially adds value to the Ethiopian Economy at a macro and micro level” said the Manager.

    The agreement will bring the global automotive brand to Ethiopia as the first car assembly plant in East Africa for Kia. Mr. Soonnam Lee, Kia Motor’s President of Middle East & Africa Regional Headquarters explained that Kia’s business partnership with Belayab will allow the company to expand production capacity to meet growing global demand. "As one of the most youthful and exciting brands in the world today, Kia offers some of the best-looking, high quality vehicles to its customers and we are excited to bring our products to Ethiopia with this partnership. Kia Motors’ agreement with Belayab is also partnership based on mutual understanding on the need for capacity building and knowledge transferring endeavors,” he said.

    The assembly facility will have the capacity to assemble 12 cars per day in a single shift; 240 cars per month. It is estimated that a total of 3000 KIA vehicles will be assembled each year. The 30,000 m2 assembly plant located in Adama expects to add 100 more employees who recently graduated from the technical college. The first Kia vehicle assembly is expected to be completed in January 2017.

    Ethiopia produces about 8,000 commercial and other vehicles a year for the home market, about a quarter of which are cars. Among those present include Chinese firms Lifan and Geely.

    Though a minnow in the continental market, the government wants to turn the industry into one of the biggest on the continent through incentives such as cheap labor and tax breaks.


    Read more »
  • These are the '10 emerging markets of the future'

    A new report from BMI Research has identified the "10 emerging markets of the future" — the countries that are set to become new drivers of economic growth over the next 10 years.

    BMI estimates that these countries will cumulatively add $4.3 trillion to global GDP by 2025 — roughly the equivalent of Japan's current economy.

    In general, manufacturing and construction are the sectors that will drive the economies. BMI reports that new manufacturing hubs are set to emerge in Bangladesh, Myanmar, and Pakistan, and that these countries will see particularly strong growth in exporting manufacturing industries. And construction growth is going to be widespread throughout all the countries — partly to facilitate increases in urban populations and partly to help develop the manufacturing sector.

    On the other hand, extractive industries — like mining, oil, and gas — are going to play a far smaller role in driving growth than they have the past 15 years.

    While it might provide bright spots for some countries, the report states, "the ubiquitous commodity-driven growth model that was derailed by the 2012-2015 collapse in commodity prices is not coming back."

    Here are the 10 new emerging markets and the sectors that drive their growth:

    1. Bangladesh

    Primary sector: Agribusiness
    Key exports: Garments, agricultural products
    2015 GDP growth: 6.4%
    Unemployment rate: 4.9%
    Exchange rate: 77.42 Bangladeshi taka per US dollar

    "Bangladesh's export-oriented industrial sector already accounts for more than a quarter of GDP and will continue to develop as a global manufacturing hub in the coming years."

    2. Egypt

    Primary sector: Natural gas
    Key exports: Oil, fruits and vegetables, cotton
    2015 GDP growth: 4.2%
    Unemployment rate: 12.8%
    Exchange rate: 7.72 Egyptian pounds per dollar

    "We expect continued investment across the housing sector in Egypt, given the almost 1 million additional urban residents per year that we forecast over the next 10 years. There will be some investment in Egypt's large manufacturing export base in a continuation of recent investment in the autos and food sectors."

    3. Ethiopia

    Primary sector: Agribusiness
    Key exports: Coffee, oilseeds, vegetables, gold
    2015 GDP growth: 10.2%
    Unemployment rate: 16.8%
    Exchange rate: 21.55 Ethiopian birr per dollar

    "Construction to meet rapid urbanisation and ambitious state infrastructure targets will be the main driver of economic growth in Ethiopia ... Ethiopia's construction industry will record the highest growth in Sub-Saharan Africa, averaging real annual growth of 10.7% between 2016 and 2025."

    4. Indonesia

    Primary sector: Agribusiness
    Key exports: Mineral fuels, machinery parts
    2015 GDP growth: 4.8%
    Unemployment rate: 5.5%
    Exchange rate: 13,577.6 Indonesian rupiah per dollar

    "Growth in Indonesia will be far less commodities-centric than over the past decade, as the mining and oil and gas sectors will stagnate ... The government remains committed to developing a manufacturing-based export economy by boosting infrastructure spending and streamlining bureaucracy."

    5. Kenya

    Primary sector: N/A
    Key exports: Tea, horticultural products, coffee
    2015 GDP growth: 5.6%
    Unemployment rate: 40%
    Exchange rate: 99.73 Kenyan shillings per dollar

    "As Kenya imports almost all of its energy needs, lower average oil prices over the next decade compared to the previous decade will boost both Kenyan consumption and non-energy investment. Growth will be centered in ... infrastructure (including renewable energy), financial services and retail trade."

    6. Myanmar

    Primary sector: Mining
    Key exports: Natural gas, wood products
    2015 GDP growth: 7%
    Unemployment rate: 5%
    Exchange rate: 1,171.8 Burmese kyat per dollar

    "Investment will continue to pour into a range of industries as Myanmar reaps the benefits of substantial political reform enacted since 2010. We believe that the trends of economic liberalisation and political democratisation will remain in place and keep the economy on track for strong growth over the coming years."

    7. Nigeria

    Primary sector: N/A
    Key exports: Oil, cocoa
    2015 GDP growth: 2.7%
    Unemployment rate: 23.9%
    Exchange rate: 196.9 Nigerian naira per dollar

    "The significant growth that we forecast for Nigeria's economy will be principally driven by the secondary and tertiary sectors of the economy. Financial services are a bright spot due to the relatively low penetration of financial services in the country. Retail sales will grow strongly, though mostly in the low value goods segment due to the fact that essentials spending remaining at around three quarters of total household income."

    8. Pakistan

    Primary sector: Agribusiness, oil
    Key exports: Textiles, rice
    2015 GDP growth: 4.2%
    Unemployment rate: 6.5%
    Exchange rate: 101.45 Pakistani rupees per dollar

    "Pakistan will develop as a manufacturing hub over the coming years, with the textile and automotive sectors posting the fastest growth at the beginning of our forecast period. Domestic manufacturing investment will be boosted by the windfall from lower energy prices compared to the last decade, and improved domestic energy supply."

    9. Philippines

    Primary sector: N/A
    Key exports: Semiconductors and electronic products, transport equipment
    2015 GDP growth: 5.8%
    Unemployment rate: 6.3%
    Exchange rate: 45.503 Philippine pesos per dollar

    "Key sectors will include autos and construction. Robust private consumption and a booming construction sector will translate into growing demand for both passenger vehicles and commercial vehicles ... Ongoing economic and business environment reforms, such as an anti-corruption drive, have made the Philippines more conducive for investment."

    10. Vietnam

    Primary sector: Agribusiness, oil refining
    Key exports: Clothes, shoes, electronics
    2015 GDP growth: 6.7%
    Unemployment rate: 3%
    Exchange rate: 21,928 Vietnamese dong per dollar

    "We expect the manufacturing and construction sectors to outperform... thus helping to underpin growth in the broader industrial sector. These sectors will remain attractive to foreign investors, owing to relatively low labour costs [and] the government's gradual relaxation of foreign ownership restrictions rules."

    Data from the CIA World Factbook


    Read more »
  • Ethiopia's Skyline

    The real estate sector is a major employer in Ethiopia, with numerous high-rise building and apartments coming up across Addis Ababa. Some projects are government-funded, while others are owned by private developers. And some of these are spectacular, such as the 6-hundred-apartment complex built by Chinese investors. CCTV's Girum Chala has this story.

    Read more »
  • Ethiopia opens new industrial park

    Ethiopia has unveiled Africa’s largest industrial park in the city of Hawassa 275km southeast of the capital Addis Ababa – one of several it is building or planning to build all over the country.

    The project is inspired by China and the Hawassa Industrial Park (HIP) – like many equivalents in China – will be dedicated solely to just one sector, textile and apparel.

    At 1.3 million square meters it is the biggest in Africa and also the largest dedicated solely to export, said Zemdeneh Negatu, managing partner at Ernst and Young international consultancy firm.

    Speaking at the inaugural ceremony last week, Ethiopian Prime Minister Hailemariam Desalegn said the manufacturing sector’s share in Ethiopia’s gross domestic product (GDP) for many years stood at only 0.5 percent, showing the need for economic re-structuring if the country was to fulfil its economic promise.

    Ethiopia’s economy, despite a period of rapid economic growth, still largely depends on agriculture. Volatile commodity prices, a severe drought, and political unrest have all curbed expansion.

    The HIP has attracted 15 major manufacturing firms from China, Indonesia, the US, and Ethiopia itself. But Yuan Li, chairman of the China Civil Engineering Construction Corporation (CCECC) which designed and built the industrial park, says it has even wider significance.


    Read more »
  • Ethiopia approves over $ 12 billion annual budget

    The Ethiopian parliament on Monday approved a total budget 274.3 Billion Birr ($ 12.57 billion) for the 2016/2017 fiscal year.

    The budget which was unanimously endorsed by lawmakers today has saw a 13.7 % rise compared to the previous year budget.

    Sudan Tribunehas learnt that of the total budget $ 4.8 billion is allocated for capital expenses and $ 3.1 billion for regular expenditures.

    Around $ 4 billion is allocated for subsidy to regional states, and $ 550 million for expenses of sustainable development.

    During today’s session, Ethiopian Prime Minister Hailemariam Desalegn said Ethiopian industry and service sector have shown growth of 7%.

    The premier said the country was subjected to slow economic growth later this year due to impacts of El Nino which has significantly affected the agricultural sector.

    Ethiopia is among some African countries which were severely hit by food insecurity which was caused by El Nino induced drought.

    The drought which is worst in decades led to sharp deterioration in food security and massive drop in agricultural and pastoral production forcing over 10 million Ethiopians to depend on food Aid.

    “The Ethiopian government has expended 800 million dollar to control the impacts of drought,” Hailemariam said.

    The Premier said the country has performed good in growing its economy during this fiscal year (2015/216) and it was substantiated by the International Monetary Fund (IMF).

    The Premier said the country’s economic growth for this year is expected to be 8.5%, lower than previous years when the country had been registering double digit economic growth.

    According to Hailemariam, the government has worked aggressively to curb hitches of good governance.

    Read more at Sudan Tibune

    Read more »
Like our AddisZefen facebook page for more latest Ethiopian news!