Ethiopia's Passion For Industrialization /ABN/MAY/2023

Ethiopia’s passion for Industrialization

EdItorIal Curbing

sKYroCKEting priCEs

Ethiopia has made substantial progress in recent decades, but is now confronting mounting economic challenges. Ethiopia faces many symptoms of an ill economy, including mounting debt, a shortage of foreign exchange, a swelling unemployment rate, inflation, low productivity, and workforce skills mismatched to the economy’s needs. Policy reforms informed by research findings are required to address the situation.

The economic consequences of the pandemic appear to be more protracted than health-related repercussions. This will reverse economic gains made in the past few years, which have seen large segments of the Ethiopian population lifted from poverty. The number of people living below the poverty line is now expected to increase due to various reasons, according to researches conducted by different scholars and institutions.

More than ever the people of Ethiopia are currently suffering from illogical and unreasonable price hike in almost all types of goods and services. The soaring price in major food items such as sugar, edible oil, cereals and crops as well as vehicle spare parts is becoming severe headache for the majority. This growing cost of living both in urban and rural areas is being fueled by socio-political unrest in various parts of the country. In addition to the economic and political pressures from the Western nations has been exacerbating the situation in the country.

The agriculture sector is the largest employer

in the country and generates significant foreign exchange for Ethiopia, particularly coffee and oil seeds. Nevertheless, it has not yet caused either surplus production or even sufficient food supply to the ever-increasing population.

Ethiopia’s hospitality sector has collapsed as travel bans have gone into effect around the world. The collateral damage is significant as hospitality accounts for over 8 percent of the total employment in the country. At the same time, Ethiopia’s manufacturing sector a key focus of the government in recent years has weakened due to the disruption in supply chains worldwide.

While working on strengthening domestic taxation and raising more revenues to finance public goods, the priority needs to be on improving the business environment to attract private capital mobilizing private finance for development. The shift from agrarian to industrial to post-industrial economies required different worker skills.

The Government of Ethiopia along with local and international non-governmental organizations needs to advance a business-friendly and enabling policy environment in order to promote increased private sector investment and growth, and expand trade opportunities. Most importantly, the Government should critically work on boosting agricultural produces, stabilizing the market through sustainable regulatory framework and law enforcement activity and ensure peace and order across the nation in order to pull down the skyrocketing cost of living, and resume the economic growth.

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CONTENT

Ethiopia’s passion for Industrialization

By Daniel Tiruneh

The Ethiopian Industrial Parks Development Corporation, IPDC, is a governmental institution established on December, 2014 E.C. with the aim of meeting the goals of GoE’s Growth and transformation plan. Officially established by theFDRE council of Ministers as a federal government public enterprise, theIPDC is tasked with thedevelopment, administration and promotion of industrial parks.

With the ever increasing demand for industrialization, the importance of the IPDC in propelling an unprecedented economic growth and transformation is undeniable. Since its establishment, the IPDC has achieved various noteworthy feats, becoming a catalyst for rapid industrialization endeavors. The IPDC has made an appreciable stride in developing over 12 industrial parks each of which specializing in different industrial sectors.

One notable manufacturing sector that is given special attention is the pharmaceutical industry. In collaboration with the Ethiopian Pharmaceuticals and Supply service (EPSS), the IPDC involves in the management and administration of long-term procurement guarantee mechanism, which is available to those pharmaceuticals manufacturers operating in Ethiopia that win a EPSS tender and for those products that a manufacturer exports.

In order to encourage investors in the field of manufacturing, the IPDC implements various incentive measures. One area of focus is the pharmaceutical industry for which tax holidays are available to investorsin different industrial parks. These tax incentives may not otherwise be availableto pharmaceutical manufacturers operating outside of industrial parks.

ABN’s Daniel Tiruneh has spoken to the CEO of IPDC Aklilu Tadesse about the various undertakings of the corporation, its areas of engagement and future trends. In addition, the Dire Dawa Free Trade Zone, DDFTZ, which is the first of its kind in Ethiopia, was also a topic of discussion.

aKlilu tadEssE CEO, IPDC

ABN;Can you tell us about the overall activities of Industrial Parks Development Corporation (IPDC) in the country? The legal framework, plans, accomplishment etc.

Aklilu: IPDC aspires to transform Ethiopia’s agrarian economy in to an industrial one. Industrial parks are being used as a tool to achieve the country's macroeconomic and socioeconomic goals by providing the necessary infrastructure and production systems for sectors that have been given priority by the government. Embarking on industrial park development, Ethiopia has attracted foreign direct investment, generated revenue, facilitated avenues for technology and skill transfer and created ample jobs. It offered decent investors incentive packages, competitive labor price and access to market with its attractive investment and legal framework. The government of Ethiopia avails fiscal incentives along the different stages of investment within the industrial parks from construction to operation and marketing. Industrial park developers and enterprises benefit from a special tax and other financial

incentives package that is coupled with efficiency enhancing facilitation support and investment protections. In order to ensure a proper management of the industrial parks, the Ethiopian Government came up with the Industrial Parks proclamation 886/2015 providing that industrial parks can be developed by any profit-making public, public-private or private enterprise. This includes the Industrial Parks Development Corporation (IPDC), which is in charge of managing the development of large, medium and light industrial parks and the ministries of industry and agriculture, which are responsible for the integrated agro-industrial parks development. The Industrial Parks Development Corporation (IPDC) has so far built and operated thirteen industrial parks, attracting more than 120 internationally recognized industrial park enterprises and creating more than 100,000 jobs. In addition, the Corporation has been playing a significant role in the country's foreign exchange earnings by exporting a total of more than $1 billion worth of products since the commencement of operation by the industrial parks.

ABN; How many of them have already been completed and gone operational? And how many of them are under construction?

Aklilu: To date, there are more than twenty four industrial parks across Ethiopia both operational and under construction. IPDC has so far built and operationalized

13 Industrial parks, Four Agroprocessing parks developed by Regional states, additional six operational by private developers and one park under construction by private developer. The Industrial Parks which are built under IPDC supervision have all of the required infrastructure to provide investors with the highest quality services. Asphalt road construction, street lighting installation, and security CCTV cameras are key infrastructural aspects of all Ethiopian industrial parks. Electricity substations, telecommunications and internet services, appropriate water supply, and wastewater drainage culverts with effluent treatment are among the parks’ infrastructure and utilities. The industrial parks also have fire stations, health care facilities, police stations, and training colleges. All of the Industrial Parks have transportation logistics and can convey items to export destinations.

ABN; Would you tell us about details of those parks that have already gone operational? In terms of specialization, capacity, lying hectares etc

Aklilu: Bole Lemi Industrial Park, located in Addis Ababa, is Ethiopia’s first industrial park developed by IPDC with a focus on exports. The park is constructed in two phase with a the 1st phase contains 20 factory sheds with a combined land area of 172 hectares to produce garments. The Second phase Bole has also developed two sheds and furnished space on 181 hectares of land to make Peril and textile. The other park close supervision of us is Kilinto industrial park which is also located in Addis Ababa, with a total area of 279 hectares of land for the manufacturing of pharmaceutical products. Hawassa Industrial Park, one of the largest industrial parks, covering 400 ha and contains 52 factory sheds specialized in textile and apparel manufacturing. The Mekelle Industrial Park is located in Tigray. The park has 15 factory sheds with a total area of 75 hectares to manufacture textiles and garments. The Kombolcha industrial park

is located in the Amhara region, under the Kombolcha City Administration. It has also nine Factory sheds and a total land area of 75 hectares to make Peril and cloth. Adama Industrial Park is in the Oromia region, in the Adama City Administration. It includes 19 Factory sheds and 120 hectares of land to make garment clothing and machinery. Jima The industrial park is located in Jimma City Administration’s Oromia region. There are nine Factory sheds. It has a total land area of 75 hectares for textile and garment manufacturing. The DebreBirhan industrial park is located in the DebreBerhan City Administration in the Amhara region. It has eight factory sheds with a total area of 75 hectares to make garments and clothing, as well as trade. Dire Dawa Free Trade Zone is part of the Dire Dawa city administration. The Park has 15 sheds and 150 hectares of developed land for garment, textile, and apparel manufacturing. When completed the park will have a total area of 4150 hectares. Bahir Dar is located in Bahir Dar City and contains 8 sheds with a total land area of 75 hectares for the production of textiles and clothing.

ABN; Given the country’s plan and the already accomplished works with regard to development of industrial parks, how would you describe the success stories and the challenges in achieving the goals and implementation of plans?

Aklilu: According to World Bank Study, in less than a decade, Ethiopia’s industrial parks have directly created 90,000 plus jobs. That is a meaningful share of new formal private sector jobs but a small fraction of Ethiopia’s rapidly growing labor force. With modest inward investments, net exports from Ethiopia’s IPs grew rapidly reaching US$163 million in 2019/20 and approaching half of Ethiopia’s total manufactured exports. IPDC has attracted + 100 investors and an estimated US$ $950 million in inward investment since its establishment. The trend of export from IPs’ in the past five years shows promising growth rate if it continue with the same rate for the next five year which would mean the IPs’ export earnings would surpass the combined total of the three largest agricultural exports by 2027. Job creation could also grow by a factor of five within the existing stock of existing IPs alone. Beyond FDI and export earning Industrial parks became a gate to globally renowned brand and being instruments in promoting “Made in Ethiopia” to global market.

ABN; Would you tell us about the FDI attracted with industrial parks development in the country? About their origins and categories or specialization?

Aklilu: The total FDI inflow to IPs is estimated to be close to a billion dollar since 2014. More than 90% of the investment is in garment and apparel sector which are mainly targeting export market. In addition, key FDI’s such as Soufflet and Booltmalt are located in Industrial Parks in fulfilling 100% malt demand of domestic Brewery companies. Majority of the FDI inflow is from China, India, Bangladesh, South Korea and Sri Lanka.

ABN; What would you tell us about the government’s commitment and strenuous efforts to see the plans and projects of industrial parks successfully accomplished?

Aklilu: The Ethiopian Prime Minister, Abiy Ahmed /PhD/, close supervisions and site visit as well as strategic directions are of paramount importance to us. The composition of the Board of directors is from core ministerial offices that has direct impact in the success of industrial parks. Ministry of trade and regional integration, Ministry of industry, national bank of Ethiopia, Ethiopian investment commission, each institution as a board have empowered to give strategic insights at the same time solve bottlenecks faced by the corporation.

With a close supervision, support and commitment from the Prime Minister and Ministry of Finance Industrial Parks project become the key strategic direction of the government in terms of Attracting FDI, Creating Job, promoting quality industrial infrastructure which meets buyers standard, backward forward linkage and spillover effects. In addition, the Board of Directors of IPDC which is formed by key Mistrials from partners and stakeholders timely evaluate the progress made and support IPDC in overcoming its challenges.

ABN; How many of those projects by foreign investors are successful and how would describe their performance?

The success of a foreign investment can be evaluated from varies parameters. If we measure in terms of a successful completion of factory setup and kick off operation, Interms of meeting their operational goals, i.e. production capacity, export, job creation, profit, market penetration, and other

ABN; Would you tell us about the employment opportunity and other economic benefits accrued so far with the industrial parks development in the country?

Aklilu: As I tried to mention, few of the achievement made by Industrial Parks, the overall strategic objective of industrial parks are to attract foreign investment, create employment and increase export. In this regards, Industrial parks under IPDC attracted more than 120 foreign companies, able to create more than hundred thousand employment opportunity and exported close to $1 billion. In order to double these macroeconomic achievements, IPDC management is continuously improving operation and management of Industrial parks in a way that creates conducive business climate to stakeholders of the sector.

Kilinto Industrial parK

ABN; Let’s discuss about a specialized industrial park, the Kilinto Industrial Park, and the facilities it incorporates?

Aklilu: Kilinto Industrial Park is dedicated to various types of pharmaceutical products including final medicines and formulations, excipients, API, medical supplies, and pharmaceutical packaging. It covers an area of 279 hectares, of which 166 hectares are leasable land readily available for investors, and 24.32 hectares are handover by 11 IP Enterprises.

Kilinto Industrial Park offers several basic infrastructures to support businesses operating in the park. These include:

Power: The park has a power capacity of 200MW for each plot, with a permanent power supply averaging 1MW/RMU. The current electricity rate is approximately 3 US cents/kWh, which is one of the lowest rates in the world.

Water: The park has an average total water discharge of 289.47 L/s from six boreholes, ensuring reliable water supply for industrial operations.

Internet and Telephone: Kilinto Industrial Park provides high-speed internet services with a total capacity of 15 GB/s, along with available telephone lines to facilitate smooth communication for businesses operating in the park.

Wastewater Treatment: The park has a wastewater treatment plant (ZLD) with a capacity of 14,000m3/day (13,000m³/ day for ETP and 1,000m3/day for STP), ensuring effective treatment of industrial wastewater in an environmentally friendly manner.

Road Infrastructure: The park has 19.96 km of compounded asphalt access roads with widths of 30m, 20m, and 15m, providing easy access to each plot within the park.

Security: Kilinto Industrial Park is equipped with park security measures, with Federal police and Addis Ababa police members working jointly with the park security agencies 24/7 to ensure a safe and secure operating environment for businesses.

Government Services: The park offers a one-stop shop that provides government services related to customs clearance, investment licensing, administration, product registration, and other necessary services to facilitate smooth operations for businesses.

Warehousing and Testing Services: Joint warehousing, calibration, and testing services are available within the park to support businesses with their operational needs.

Transportation Connectivity: Kilinto Industrial Park is strategically located 20 kilometers from Addis Ababa Bole International Airport and is also connected by the new electric railway to the Port of Djibouti, which is 863 kilometers away. This railway offers cold chain services, providing convenient transportation options for businesses operating in the park.

ABN; What incentives are available for pharmaceutical manufacturers in industrial parks?

Aklilu: The following tax holidays are available to pharmaceutical manufacturers in industrial parks, but do not apply to manufacturers operating outside of industrial parks:

a. Formulation/final medicine -production inside of industrial parks: 10-12 years

b. Active Pharmaceutical Ingredient (API) production inside of industrial parks: 12-14 years

c. Pharmaceutical packaging production inside of industrial parks: 7-8 years Pharmaceutical manufacturers are also exempt from paying duties and other taxes on the import of capital goods, construction materials, spare parts, and vehicles, and there are no taxes levied on exports.

ABN; How is access to the domestic market and export facilitated for pharmaceutical manufacturers in Ethiopia?

Aklilu: Access to the domestic market is facilitated through measures that leverage public procurement, such as the Pharmaceuticals Fund and Supply Agency (PFSA) managing a long-term procurement guarantee mechanism for manufacturers that win an EPSS tender or export their products.

The length of the guarantee depends on the percentage of production that the manufacturer exports, with up to 3 years for 30% exporters and up to 5 years for 60% exporters. EPSS also offers a 25% price preference and prepayment of 30% of the tender value to manufacturers awarded a contract by EPSS.

ABN; Compared to other African or developing countries, particularly in the neighborhood and East African sub region, how would you describe the status of Ethiopia? Or would you compare the industrial parks development of Ethiopia with other African countries?

Aklilu: The development of IPs in Ethiopia, yet very recent phenomenon, can be said it has surpassed most of other Africa countries in terms of number of IPs developed and put into operation. The concept of IPs in other countries is understood under the special economic zone umbrella. In Ethiopia, The first Industrial Park was built by chinese private investors in 2010. Four years later, GoE decided to establish IPDC to design, build , operate and manage industrial parks across the nation. With less than a decade, IPDC has managed to build and operationalize more than 13 industrial parks. The parks are built with a high international standards to meet FDI expectation and the plug and play arrangement enable foreign investors to easily set up their factor in Ethiopia. The lesson learned from South East Asia gave competitive advantage to Ethiopia to develop conducive Investment climate. In this regards, no other African country has managed to promote Industrial parks like Ethiopia does.

ABN; On the other hand, how would you describe the role of AfCFTA for Ethiopia’s continental trade as the country has been engaged in industrial development and been manufacturing goods for export? In terms of AfCFTA’s role in creating market opportunities?

Aklilu: The AfCFTA's primary goals are to accelerate the pace of economic regional integration in Africa by eliminating tariff and non-tariff barriers to all trade in goods and services, as well as to liberalize the movement of people and investments across the continent. As a result, it is estimated that full implementation of the agreement will increase East African trade by approximately 13% by 2030. This equates to approximately $737 million in trade. Ethiopia can expect a 10% increase over the same period, amounting to approximately USD 10.7 million.

Ethiopia's market opportunities from the AfCFTA will be in the following sectors, according to the International Economics consultancy: vegetables, coffee, oilseeds, textiles and garments, machinery, and textiles and garments. Ethiopia has a comparative advantage in the horticultural commodities sector due to its favorable climate, large domestic market, and connections to the European market.

ABN; Do you think, Ethiopia is on the right track to achieve the goals of SDG as far as industrial development is concerned?

Aklilu: As Africa's first zero-emission textile industrial park, the Ethiopian government is trying to develop IP into Africa's sustainable industrial park with state-of-the-art infrastructure and equipment. Industrial parks are becoming a tool in promoting green and circular economy. To ensure this the GoE invested in a state-of-theart zero-liquid-discharge treatment plant, with such 90 % of the water is recycled and reused, and the final waste is crystallized. While more costly than the government's original plan, this initiative meets the government's aim of meeting leading international standards, placing priority on resource conservation and differentiating Ethiopia’s Industrial Parks from other parks worldwide.

ABN; What special emphasis has been given to the industrial parks of the country as the country needs to properly exploit the potential of AfCFTA?

Aklilu: Industrial parks are challenged by regional integrations around the world. This is because the fiscal incentives provided in industrial parks are designed to attract FDI, which is involved in importing raw materials from its parent company in another country. As a result, member countries exporting to other AFCFTA members from their SEZs must meet the region's minimum sourcing requirements for raw materials. To properly exploit the AFCFTA, industrial parks must source raw materials from local markets or from AFCFTA member countries; otherwise the appropriate tariff rate will be applied. Some of the programs on which the corporation is working to increase the forward and backward linkages of the industrial parks and prepare for AFCFTA include strengthening business-to-business linkages between industrial park companies and local SMEs, promoting SMEs to do business in the IPs, assisting investors to access resources from the local market, and collaborating with agricultural sector players.

ABN; Now, let’s come to Ethiopia’s first FTZ, Dire Dawa FTZ, what does it comprise and major activities within the Zone?

Aklilu: Manufacturing, trade, and logistics are the three major sectors of the FTZ. The manufacturing sector is the same as the manufacturing sector in industrial parks, which engages in processing raw materials to produce products primarily for the export market and partly for the local market. The new sector comprised in the FTZ is the trading sector, which will engage in both import and export trade. Any FTZ trading company can import goods from other countries, store them, add value to them, and then re-export or sell them in the domestic market. In this process, unless the goods are sold to the local market, the trader is exempt from any customs duty tax. The third sector, the logistics sector, is in the FTZ to provide logistics-related services to zone users. The value-added logistics services include loading and unloading of cargo, consolidation and deconsolidation, sorting, customs clearance, freight forwarding, cargo transportation, and other related services. To complement these three sectors, auxiliary services such as banks, insurance companies, consultants, cafés, restaurants, and other services are provided in the zone.

The FTZ has a variety of factory sheds, warehouses, open storage yards, serviced lands, an exhibition hall, shopping malls, and other amenities. The service lands are well equipped with basic infrastructure, and the investor is required to construct vertical infrastructure in accordance with zone standards and conduct business while under a land lease agreement with the corporation. The factory sheds and warehouses are ready-made facilities in which the investor can run businesses in a "plug and play" modality.

ABN; How would you summarize its contribution to the country’s successful economic activities in line with its industrial parks development?

Aklilu: The free trade zone benefits Ethiopia's economy in the three ways, among others;

A ) Stabilize the economy: Economic sabotage contributed to the rise in commodity prices. FTZs can help by ensuring that there are sufficient reserves of goods and that they are distributed to the economy in a timely manner. The FTZ is thought to have a positive impact on lowering production costs and thus deflating commodity prices by reducing logistics costs.

B ) Attract both domestic and foreign direct investment: The FTZ attracts investors interested in industries such as trading, offshore, re-exporting, consulting, trade facilitation, and related business fields, resulting in capital inflows into the economy as well as technology and knowledge spillover effects.

C ) Increase economic activity and job opportunities: As a result of increased logistics and other business activities, the country can benefit from the employment opportunities and business symbiosis created, including intellectual property (IP) throughout the country.

ABN; What makes this FTZ so special and more advantageous?

Aklilu: The Dire Dawa Free Trade Zone is the first of its kind in Ethiopia, making it special. Not only is it the first, but it is also located in Dire Dawa, a city known for its proximity to two major ports, Djibouti Port and Berbera Port. The DDFTZ is more advantageous for investors in general and Ethiopian investors located in neighboring counties’ FTZ in particular for reasons such as access to better infrastructure, lower facility rental prices, better weather conditions, access to quality and skilled labor, and streamlined governmental services at the one-stop service window.

ABN; What lessons have been learned and also what about challenges that have come across in realizing the Dire Dawa FTZ?

Aklilu: From conception to completion, the Dire Dawa Free Trade Zone took only three months. Under the supervision of the steering committee, the technical committee has managed to finalize the policy framework, institutional setup, address infrastructural and facility gaps, standardize operational procedures, and address other relevant issues in the last three months. A national project can be completed on time and with high quality if different institutions work well together.

ABN; Would you tell us about the synergy and collaboration among the different stakeholders in the development of FTZs in the country?

Aklilu: The development of Dire Dawa FTZ has brought together different governmental offices. The IPDC is mandated to conduct the construction of the physical infrastructure and all relevant facilities, as well as streamlining the working procedures in the FTZ. The Ethiopia Investment Commission is the lead government entity to coordinate the one-stop service where all governmental service providers sit in one room to provide FTZ-related services such as licensing, product standard approvals, visa processing, and environmental control. The EIC is also mandated to conduct promotion activities and attract, register, and license investors interested in investing in the FTZ.

The ministry of trade and regional integration has identified all commodities that are allowed to enter and leave the zone. The ministry is also in charge of providing licenses for trading companies to operate in the zone and enforcing regulations in light of trading activities. Customs commissions provide relaxed customs procedures to give clearances to traders. The Ministry of Finance decides on the various fiscal incentives for investors engaged in the three sectors. As a result, all relevant government agencies have worked together to make the FTZ a reality, and the same synergy is expected during the FTZ's operation.

"Plug anD Play"

ABN; What would you tell us about the measures or activities carried out in involving the private sector in the development of industrial parks and also in FTZs? What can you tell us about the activities in this regard?

Aklilu: The major departure to involve the private sector in developing industrial parks can be traced back to when the first private industrial park was established in the town of Dukem, the Eastern Industrial Park, a Chinese-owned industrial park, followed by other privately developed industrial parks in Addis Ababa, Modjo, Mekelle, and Kombolcha. To further encourage the private sector, particularly investors with limited capital, the government has embarked on the development of industrial parks with horizontal infrastructure (access roads, water, electricity, telecom, waste treatment plants, and so on) and has invited the private sector to develop vertical infrastructure (factory sheds, buildings, and other related facilities). The corporation also avails partially developed lands for IP development in a phased approach, which are mainly to be developed by private developers.

EThiOpiAN AirliNEs COmmiTs TO ThE

DEvElOpmENT Of AfriCA wiTh NEw AviATiON UNivErsiTy

BY Staff /ABN/

A firsT Of AfriCA!

EThiOpiAN AirliNEs DEvElOps

ThE AviATiON ACADEmy iNTO AN AviATiON UNivErsiTy.

Ethiopian Airlines Group remains committed to the development of African aviation industry. It has been training pilots, cabin crew, technicians, customer service agents and aviation leaders for over 65 years, and now it is stretching even further to train the next generation of engineers and aviation professionals.

Last month, Ethiopian Airlines celebrated 77 years of operations in the aviation industry. Its training institution, Ethiopian Aviation Academy (EAA), which is the biggest Aviation training centre in Africa, has been developed into a fully functional university offering various undergraduate and postgraduate degrees.

Ethiopian aviation univErsitY (Eau)

EAA has provided aviation professionals for Africa and the rest of the world for many years. After over six and a half decades, it is upgrading to university level to meet the future needs of African aviation as an educational wing of Ethiopian Airlines. Ethiopian Aviation University (EAU) is an integral part of Ethiopian Airlines Group.

In addition to the aforementioned aviation training portfolios, with its state-of-the-art facilities, EAA has trained pilots for the B787, B737MAX, B737NG, B767, and A350, to mention a few. It has eight modern full flight simulators and several fixed base ones for pilot upgrade, transition and recurrent trainings and now has facilities for training and educating professionals in different aviation sectors.

The university's primary purpose is to lead and grow with current technological developments and meet the sophisticated demands of airline operations and airport management. EAU Vice President for Aviation Trainings and Acting President, Mr. Kassie Yimam, said in an interview with Simple Flying;

"When we were dealing with training, we were dealing with competencies to enable people to do some tasks. For example, pilots were meant to fly airplanes effectively and safely, that's it. Aircraft maintenance technicians are trained to maintain airplanes so they are always airworthy and safe, and they also make preventive maintenance. As time goes on, we need to develop further toward the production and manufacturing of aerospace components, airplane systems, and so on.”

Developing Human Resources

Ethiopian Airlines attributes its 77 years of excellence to the successful development of its human resources. The academy has been the backbone of its success and dominance, and to continue on this path, it intends to develop human capital even further. EAU will introduce undergraduate and postgraduate degrees in addition to its training portfolios. The programs will start in September 2023, while applications are currently open (students can apply on (etau.edu.et), Email address: etauinfo@ethiopianairlines.com). Students can choose from the following programs:

B.Sc. in Aeronautical Engineering: It will be one of the few institutions in Africa to offer an accredited aeronautical engineering degree. The course encompasses designing, developing, and modifying aircraft components and systems.

B.Sc. in Aircraft Maintenance Engineering: It is an advanced form of maintenance training it used to provide. This dives deeper into science and engineering, and after five years, graduates will earn an engineering degree and a civil aviation license.

B.Sc. in Aviation Management and Operations: This program will have two streams but will be studied as one degree. Toward the program's conclusion, students will have the option to specialize in airline or airport management.

Our development strategy is to partner with African companies, training centres, universities, airlines, airports, and so on. Look, we truly believe in the importance of partnership. So partnering will make all of us better, and it will be a win-win for all partners. So we love to have reliable partners who are serious about the importance of developing human resources for their Organization."

A firsT Of AfriCA!

BA in Tourism and Hospitality Management: Travel and tourism is a significant wing of the aviation industry. World air travel is expected to increase demand for tourism and hospitality managers over the next decade.

MBA in Aviation Management and M.Sc. in Data Science: The university will offer two postgraduate degrees. Using big data and analytics has become integral to an airline's operations. EAU will train the next generation of managers and data scientists.

The group is committed to developing aviation in Africa. It will groom talent and professionals within the airline and provide opportunities for citizens around the continent. This will help Ethiopian and its partner airlines as the next generation prepares for innovation. Mr Kassie added.

"We have been operating a successful airline, and we want to transfer the success to our students. That will help Ethiopian Airlines as well as other partner airlines in Africa. We're not going to lead this airline forever. We have to develop people who can manage our lead better and bring new ideas. We can be more successful when we teach our experiences, and then they innovate and make it better. So we get better every day. When we teach, we mean it for Africa, not only for Ethiopian Airlines, we cannot grow alone."

Feeding the Production Line

Ethiopian Aviation university aims to develop competent engineers and aviation professionals that can feed the aerospace manufacturing industry in Africa and elsewhere. The university will enable the aviation sector in Africa to create new products rather than maintain existing ones.

The institution will employ internationally renowned professors to ensure students receive the highest quality of education. There will be a primary and secondary professor to ensure the concepts taught in class are

applied well in the field. The university will also use veteran and experienced leaders and engineers of

Ethiopian Airlines to teach their experiences, in addition to primary professors who will teach concepts and theories.

Ethiopian Aviation University is one of the few universities which do have modern airplanes like B787, B777, A350, modern simulators, workshops, airline process and procedures in the group to practically demonstrate what has been thought in class.

Partnering with Various Stakeholders

Ethiopian partners with various airlines and other stakeholders across the African continent. EAU is fully owned and operated by Ethiopian Airlines. However, it is open for partnering with other institutions or airlines for the betterment of the aviation industry of Africa. The acting President added;

"Our development strategy is to partner with African companies, training centres, universities, airlines, airports, and so on. Look, we truly believe in the importance of partnership. So partnering will make all of us better, and it will be a winwin for all partners. So we love to have reliable partners who are serious about the importance of developing human resources for their Organization."

The group will be looking for partners in areas where there is potential for development and demand for its products. The African aviation market has almost fully

recovered from the COVID-19 pandemic, so great potential is waiting to be unlocked. Ethiopian Airlines' commitment to continental development is unprecedented. It plans almost to double its fleet over the next ten years and vastly expand its global network. The development of Ethiopian Aviation University will be essential to making ET one of the most prominent airline groups in the world.

COmiNg sOON

IConiC fEMalE

filMMaKEr: AmlEsET mUChiE Film

professionals

should invest their time and money in producing Ethiopian-based films in order to achieve their desired goals of gaining more audiences."

BY Staff /ABN/

Born in the Ethiopian capital Addis Ababa, producer, director and actress Amleset Muchie is the founder for Maya Film Production. At the start of her career, she studied journalism then went to USA and attended the New York Film Academy for two years, where she studied directing, writing and short acting classes.

She was inspired to work in the film industry when she was younger. She was drawn to drama, romance drama, and comedy films. Watching such films while growing up inspired her to pursue a career in acting. Reading books such as "Fiker eske mekaber" and "Sememen" was also motivating factor to embark on her current career. The telling of stories in such books played a role in the development of her career.

She has received numerous international awards for her spectacular film 'Min Alesh.' She received a platinum award for Best Actress at the New York film festival 2020 for her performance in 'Min alesh.' Another award she received for this film was the Audience Award at the African Film Festival.

"Min Alesh" is one of the most successful Ethiopian films to reach an international audience. Amleset Muchie directed and acted in the film. It's been translated into Chinese, Portuguese, and a few other languages. It has been shown at a number of film festivals and will soon be shown at film festivals in Sweden and Britain. The movie has received numerous audience awards.

Amleset entered the film industry at a young age. By the time she entered the industry,

It is our responsibility as professionals in the film industry to help it grow

knowledge and ideas for films were not widely disseminated in the community. "It is our responsibility as professionals in the film industry to help it grow." Amleset says. "Film professionals should invest their time and money in producing Ethiopian- based films in order to achieve their desired goals of gaining more audiences."

"Because the consequences are greater, it is preferable for people who lack basic knowledge in the film profession not to enter the business in the first place. Discipline and commitment in the profession comes from an initial understanding of the business." Says Amleset.

Film school is one of the most important areas that should be prioritized and worked on. Quality education in the film industry will prepare those who are interested in the field to be well-versed. Professional deliberate actions based on knowledge will always produce better results. As a result, a high-quality film school can play a significant role in the industry's growth.

Many of the current acting roles are not based on Ethiopian culture, but rather on western culture. This is one of the factors holding back the Ethiopian film industry. It is also one of the most significant factors that confuses both the audience and industry professionals. The characters who try to imitate Western styles and culture emotionally separate the audience from the story. However, if the characters created are based on Ethiopian values and culture, a larger audience can be attracted, and the industry can improve.

The reason the film industry is not providing for the economy is that the professionals themselves are not producing works that are suitable for the audience. The solution to this problem is for each professional in the film industry to perform to the best of their abilities while remaining committed and disciplined.

"If various professionals in various fields financially and morally support each other, the film industry can grow tremendously. Teamwork is essential for better film production."

The actress elaborates that every professional in the film industry, regardless of position, should respect each other's roles. This is one of the most important factors that can contribute to the sector's discipline and commitment. Excellence in work plays a huge role in producing quality work while also improving the film industry, which in turn improves its economy.

"If various professionals in various fields financially and morally support each other, the film industry can grow tremendously. Teamwork is essential for better film production."

When the Ethiopian film industry is viewed internationally, it is still in its infancy. There is a lot of work that needs to be done. Rather than comparing Ethiopian films to those of other countries, working to improve previous works at every stage of film production can make a difference.

Ethiopia's gifts in nature, culture, and history can be used to advance the film industry in a variety of ways. Audiences may be drawn in this direction as a result of building a stronger economy. "Entertainment is like a backbone for a country's economy. The film industry has the potential to significantly improve the Ethiopian economy. As a result, government support is ideal for this outcome," Amleset addresses.

Ethiopian moviegoers are becoming more interested in western and international films. Basic requirements for a particular film should be met in order to win over the audience. For example, better picture and sound quality, a better story that connects human interest, and a better story flow.

Amleset goes on to say that if a film has these basic elements, there is no reason why it won't reach a larger audience.

"The business has many skilled professionals, but they lack financial support. On the other hand, if various professionals in various fields

financially and morally support each other, the film industry can grow tremendously. Teamwork is essential for better film production." Amleset says Maya film production is one of the hopes for a better Ethiopian film industry. It's one of a kind, consisting of ten best directors and writers in order to create the best films. There will be a movie distribution platform called 'Mayaflix' as part of the work in Maya Film Production. For it to work, a software app is being developed. As a result, audiences can easily subscribe to have access to a variety of wonderful movies.

The platform not only features Ethiopian films, but also films from other African countries. Now, ten films are being produced with a standard to fit the audience. This platform aims to produce at least 50 Ethiopian films per year. Maya Film Production practices teamwork in various professions, which is hoped to shape the future for the film industry.

"Entertainment is like a backbone for a country's economy. The film industry has the potential to significantly improve the Ethiopian economy. As a result, government support is ideal for this outcome,"

world EConoMiC situation and prospECts

Multiple shocks to the world economy

A series of severe and mutually reinforcing shocks struck the world economy in 2022 as it approached the midpoint for achieving the 2030 Sustainable Development Goals (SDGs). With the impacts of the COVID-19 pandemic still reverberating worldwide, the war in Ukraine ignited a new crisis, disrupting food and energy markets, and worsening food insecurity and malnutrition in many developing countries. High inflation unleashed an erosion of real incomes and a global cost-of-living crisis that has pushed millions into poverty and economic hardship.

At the same time, the climate crisis continued to impose a heavy toll, with heat waves, wildfires, floods and hurricanes inflicting massive economic damages and generating humanitarian crises in many countries.

All these shocks will weigh heavily on the world economy in 2023. Persistently high inflation, which averaged about 9 per cent in 2022, has prompted aggressive monetary tightening in many developed and developing countries. Rapid interest rate hikes, particularly by

the Federal Reserve in the United States of America, have had global spillover effects, triggering capital outflows and currency depreciations in developing countries, increasing balance of payment pressures and exacerbating debt sustainability risks. Financing conditions have tightened sharply amid high levels of private and public debt, pushing up debt-servicing costs, constraining fiscal space and increasing sovereign credit risks. Rising interest rates and diminishing purchasing power have weakened consumer confidence and investor sentiment, further clouding nearterm growth prospects for the world economy. Global trade has softened due to tapering demand for consumer goods, the protracted war in Ukraine and continued supply chain challenges.

Against this backdrop, world output growth is projected to decelerate from an estimated 3 per cent in 2022 to only 1.9 per cent in 2023, marking one of the lowest growth rates in recent decades. Global growth is forecast to moderately pick up to 2.7 per cent in 2024, if, as expected, some macroeconomic headwinds begin to subside next year. Inflationary pressures are projected to gradually abate amid weakening aggregate demand in the global economy. This should allow the Federal Reserve and other major central banks to slow the pace of monetary tightening and, eventually, shift to a more accommodative monetary policy stance. The nearterm economic outlook remains highly uncertain, however, as myriad economic, financial, geopolitical and environmental risks persist.

A sharp downturn in most developed economies

The current global economic slowdown cuts across both developed and developing countries, with many facing risks of recession in 2023.

Growth momentum has weakened in the United States, the European Union and other developed economies, adversely affecting the rest of the world economy. In the United States, gross domestic product (GDP) is projected to expand by only 0.4 per cent in 2023 after estimated growth of 1.8 per cent in 2022. Consumers are expected to cut back spending given higher interest rates, lower real incomes and significant declines in household net worth. Rising mortgage rates and soaring building costs will likely continue to weigh on the housing market, with residential fixed investment projected to decline further.

The short-term economic outlook for Europe has deteriorated sharply as the war in Ukraine continues. Many European countries are projected to experience a mild recession, with elevated energy costs, high inflation and tighter financial conditions depressing household consumption and

investment. The European Union is forecast to grow by 0.2 per cent in 2023, down from an estimated 3.3 per cent in 2022, when further easing of COVID-19 restrictions and release of pent-up demand boosted economic activities. As the European Union continues its efforts to reduce dependence on fossil fuels from the Russian Federation, the region remains vulnerable to disruptions in the energy supply, including gas shortages.

The prospects for the economy of the United Kingdom are particularly bleak given the sharp decline in household spending, fiscal pressures and supply-side challenges partly resulting from Brexit. A recession began in the United Kingdom in the second half of 2022; GDP is projected to contract by 0.8 per cent in 2023.

Despite growing at a moderate pace, Japan’s economy is expected to be among the betterperforming developed economies in 2023. Unlike in other developed economies, monetary and fiscal policy remain accommodative. Prolonged chip shortages, rising import costs (driven by a weakening Japanese yen) and slowing external demand are, however, weighing on industrial output. GDP is forecast to increase by 1.5 per cent in 2023, slightly lower than the estimated growth of 1.6 per cent in 2022.

The war in Ukraine heavily impacts near-term economic prospects for the Commonwealth of Independent States and Georgia. The contraction of the economy of the Russian Federation and the significant loss of output in Ukraine are having spillover effects on the rest of the region. Nonetheless, the Russian economy shrank less than initially expected in 2022, with GDP declining by only about 3.5 per cent due to a massive current account surplus, the continued stability of the banking sector and the reversal of initially sharp monetary tightening. Several of the region’s economies have benefited from the relocation of businesses and residents as well as capital inflows, experiencing faster-than-expected growth in 2022. Improved terms of trade supported growth in the region’s energy exporters. Overall, aggregate GDP of the Commonwealth of Independent States and Georgia (excluding Ukraine, for which this report is not presenting a forecast due to the uncertainties involved) is expected to contract by 1 per cent in 2023, following an estimated decline of 1.6 per cent in 2022.

A worsening outlook in most developing regions

Growth in China is projected to moderately improve in 2023 after weaker-than-expected performance in 2022. Amid recurring COVID-19related lockdowns and prolonged stress in the real estate market, the economy expanded by only 3 per cent in 2022. With the Government abandoning its zero-COVID-19 policy in late 2022 and easing monetary and fiscal policies, economic growth is forecast to accelerate to 4.8 per cent in 2023. But the reopening of the economy is expected to be bumpy. Growth will likely remain well below the prepandemic rate of 6 to 6.5 per cent.

Economic recovery in East Asia remains fragile, although average growth is stronger than in other regions. In 2023, GDP growth in East Asia is forecast to reach 4.4 per cent, compared to 3.2 per cent in 2022, mainly reflecting the modest recovery of growth in China. Yet many economies in the region (other than China) are losing steam amid fading pent-up demand, rising living costs and weakening export demand from the United States and Europe. This coincides with a tightening of global financial conditions, and countries adopting contractionary monetary and fiscal policies to curb inflationary pressures. Although the expected recovery of China’s economy will support growth across the region, any surge in COVID-19 infections may temporarily create slowdowns.

In South Asia, the economic outlook has significantly deteriorated due to high food and energy prices, monetary tightening and fiscal vulnerabilities. Average GDP growth is projected to moderate from 5.6 per cent in 2022 to 4.8 per cent in 2023. Growth in India is expected to remain strong at 5.8 per cent, albeit slightly lower than the estimated 6.4 per cent in 2022, as higher interest rates and a global slowdown weigh on investment and exports. The prospects are more challenging for other economies in the region. Bangladesh, Pakistan and Sri Lanka sought financial assistance from the International Monetary Fund (IMF) in 2022.

In Western Asia, oil-producing countries have emerged from the economic slump, benefitting from high prices and rising oil output as well as the recovery of the tourism sector. Recovery in non-oil-producing countries, by contrast, has remained weak given tightening access to international finance and severe fiscal constraints. Average growth is projected to slow from an estimated 6.4 per cent in 2022 to 3.5 per cent in 2023, given worsening external conditions.

In Africa, economic growth is projected to remain subdued with a volatile and uncertain global environment compounding domestic challenges. The region has been hit by multiple shocks,

including weaker demand from key trading partners (especially China and Europe), a sharp increase in energy and food prices, rapidly rising borrowing costs and adverse weather events. As debt-servicing burdens mount, a growing number of governments are seeking bilateral and multilateral support. Economic growth is projected to slow from an estimated 4.1 per cent in 2022 to 3.8 per cent in 2023.

The outlook in Latin America and the Caribbean remains challenging given unfavourable external conditions, limited macroeconomic policy space and stubbornly high inflation. Regional growth is projected to slow to only 1.4 per cent in 2023, following an estimated expansion of 3.8 per cent in 2022. Labour market prospects are challenging. Reductions in poverty across the region are unlikely in the near term. The region’s largest economies – Argentina, Brazil and Mexico – are expected to grow at very low rates due to tightening financial conditions, weakening exports and domestic vulnerabilities.

The least developed countries, many of which are highly vulnerable to external shocks, will confront significant challenges in 2023. Growth is projected at 4.4 per cent in 2023, about the same rate as last year and significantly below the 7 per cent growth target set in SDG 8. In many of these countries, the risk of a lost decade is rising on the back of limited productive capacity, insufficient fiscal space, large macroeconomic imbalances and intensifying debt vulnerabilities. For the small island developing States, the short- term outlook remains bleak. Tourist arrivals have not fully recovered, and many of these countries are disproportionately affected by growing climate risks and natural disasters.

Central banks are vigorously fighting inflation

After a long period of price stability, high inflation has returned in many countries, disproportionately affecting low-income households. Pandemicinduced inflationary pressures, with demand recovering quickly and supply lagging amid continued disruptions in supply chains, have been persistent. Soaring food and energy prices and renewed supply shocks caused by the war in Ukraine have driven a surge in inflation and pushed up short- and medium-term inflation expectations. Average global inflation in 2022 reached the highest level in two decades. Upward price pressures will likely ease due to aggressive monetary tightening and slowing demand, but global inflation is still projected to remain elevated in 2023.

In 2022, central banks worldwide raised interest rates in quick succession to bring inflation under control and anchor inflation expectations. This shift towards tighter monetary policy was exceptionally broad-based. Over 85 per cent of monetary authorities worldwide hiked rates in the past year. The Federal Reserve led global monetary tightening, lifting its key policy rate six times from 0 to 0.25 per cent in March to 4.25 to 4.5 per cent in December 2022. This was the largest cumulative rate increase in any given year since 1980. As inflation is likely to have peaked in late 2022, central banks, especially in the developed countries, are expected to slow the pace of interest rate hikes in 2023, particularly if inflation approaches respective national target rates.

Mounting debt and balance of payment vulnerabilities

Sharp and rapid interest rate increases, elevated geopolitical tensions and a weakening global economic outlook have triggered a “flight to safety” in many countries, marked by a reversal of nonresident portfolio flows and the depreciation of domestic currencies against the dollar. Weaker domestic currencies pushed up import bills and further amplified inflationary pressures in many developing countries. Tighter financial conditions in international capital markets raised financing costs and rollover risks, adversely affecting investment and growth prospects.

Rapidly tightening global financial conditions have exacerbated balance of payment and debt vulnerabilities in many developing countries. Several commodity-importing countries have seen a significant increase in gross external financing needs in recent years. Amid rising sovereign borrowing costs,

servicing external debt has become more expensive, absorbing a growing share of fiscal revenues. Higher debt-servicing burdens are constraining much needed expenditures to support economic recovery, protect the most vulnerable population groups during the cost-of-living crisis and finance sustainable development.

In Africa, debt servicing on public and publicly guaranteed external debt averaged 10 per cent of government revenues in 2021, up from 3 per cent in 2011. Moreover, tightening financial conditions make it more difficult for many developing countries to roll over and restructure their existing debt, raising the risks of debt defaults. A growing number of developing countries, including several with large numbers of people living in poverty, find themselves in precarious debt situations.

New challenges for macroeconomic policymaking

Policymakers face difficult trade-offs in steering their economies through current crises and supporting an inclusive and sustainable recovery. Macroeconomic policies need to be carefully calibrated to strike a balance between stimulating output and taming inflation, with effective coordination between monetary and fiscal policies to minimize chances of a prolonged and severe economic downturn.

The risks of policy mistakes are significant, especially since macroeconomic policy responses have limited capacity to address non-economic shocks. Policy missteps could aggravate economic downturns and inflict further socioeconomic harm, especially on vulnerable groups.

The risk of overtightening monetary policy

Monetary policy faces major challenges and trade-offs. Many developed country central banks, including the Federal Reserve and the European Central Bank, were initially reluctant to raise policy rates, perceiving rising inflation as transitory. As it became clear that inflationary pressures were more persistent and risked de-anchoring inflation expectations, the banks embarked on an aggressive monetary tightening path, raising rates at a very fast clip in 2022. Central banks now find themselves at a critical juncture as economic prospects have weakened while inflation is not yet fully under control and fiscal challenges remain. Rapid and synchronized monetary tightening by the world’s major central banks has pulled too much liquidity out of markets too quickly, generating significant negative spillover effects on the global economy and weakening the economic prospects of vulnerable countries.

Overtightening of monetary policy would drive the world economy into an unnecessarily harsh slowdown, an outcome that could be avoided if rate increases by individual central banks accurately consider the reciprocal impacts of similar rate hikes by others. This will require more effective coordination among the major central banks, supported by clear policy messages to manage and moderate inflationary expectations.

Revisiting inflation targets

Given the policy challenges of maintaining price stability while supporting growth, central banks need a maximum degree of policy flexibility to anchor longer-term inflation expectations. The current inflation crisis, once abated, presents an opportunity to revisit their monetary frameworks and reconsider overly rigid inflation targets. Various options exist that may enable central banks to exercise greater policy flexibility while ensuring the continued credibility of monetary policy. Raising inflation targets in developed countries from 2 per cent to 3 or 4 per cent may provide more room to stimulate employment and growth in difficult times. Other options are to move to a target range, for example, between 2 and 3.5 per cent, or to target the price level rather than the annual inflation rate.

While reforming existing frameworks could yield considerable benefits, central banks will also need to pursue a deliberate and comprehensive process to avoid losses in credibility and the de-anchoring of inflation expectations. A reappraisal and recalibration of monetary policy tools based on experiences accumulated since the global financial crisis may help better support price stability and policy credibility while promoting full employment and economic growth.

The imperative of avoiding fiscal austerity

Persistent fiscal deficits and elevated public debt levels have prompted calls for rapid fiscal consolidation even as recovery from the COVID-19 recession remains incomplete and fragile. But this is not the time for socially painful and potentially self-defeating fiscal austerity. On the one hand, fiscal retrenchment tends to be associated with painful cuts to social spending that disproportionately hurt the most vulnerable groups, including women and children. Public budget cuts often reduce or eliminate programmes and social services that benefit women more than men, resulting in income losses for women, restricting their access to health care and education, and increasing unpaid work and time poverty. Such impacts further exacerbate the already dire situation of those who have yet to regain employment and livelihoods due to a weaker-than-expected economic recovery. At the same time, an excessively early or larger-than-needed shift to austerity would also stifle growth, delay recovery from current crises and undermine much needed financing for achieving sustainable development and fighting climate change.

Amid an increasingly challenging macroeconomic and financial environment, many developing countries are at risk of entering a vicious cycle of weak investment, slow growth and rising debt-servicing burdens. Any rapid fiscal consolidation, through significant expenditure cuts or tax hikes, would likely push economies into recession or lead to protracted slow growth. This will worsen rather than improve debt sustainability in developing countries.

Fiscal expenditures, when properly directed, are particularly effective in supporting growth and development in times of economic slack due to the large multiplier effects of public spending. In most developing countries, actual output is still below potential output, implying persistent economic slack. In such a situation, public investment does not crowd out private investment but can instead be a powerful tool to generate jobs and reinvigorate growth. Public investment not only boosts short-term aggregate demand but also stimulates capital formation, expanding productive capacities and lifting potential growth. Especially at a moment of many uncertainties, strategic public investment signals policy commitment and will likely crowd in private investment, which will remain critical for mitigating the scarring effects of the pandemic. By expanding productive capacities, public investment can also lessen supply-side constraints and reduce inflationary pressures in the medium term. As fiscal space is constrained in most countries, public expenditures need to be well managed, targeted and efficient.

Current challenges demand a transformative SDG stimulus package as recently proposed by the United Nations Secretary-General. This would help offset deteriorating financing conditions and allow developing countries to scale up investment in sustainable development. The package addresses both urgent shortterm needs and requirements for long-term sustainable development finance. It calls for a massive increase in such finance, including for humanitarian support and climate actions, through concessional and non- concessional funding.

Stronger international cooperation is imperative

The pandemic, the global food and energy crises, climate risks and the looming debt crisis in many developing countries are testing the limits of existing multilateral frameworks. International cooperation has never been more important than now to face multiple global crises and bring the world back on track to achieve the SDGs.

Since the start of the pandemic, the international community has offered financial support with a sharp increase in the provision of IMF emergency lending to developing countries, most recently, for example, through a new food shock window. In August 2021, a $650 billion IMF special drawing rights (SDRs) allocation the largest in history was approved to provide liquidity to the global financial system. Only a small fraction $21 billion was allocated to low-income countries, however. Some countries have reallocated a share of their SDRs to Africa, led by China, which has pledged $10 billion of its $40 billion allocation to the continent. While the SDRs remain an important source of liquidity support for countries facing balance-of-payment challenges, the interest rate on them rose sharply in 2022. The international community will need to cap interest and charge rates to ensure that the poorest and most vulnerable countries can access the facility to meet near-term financing needs.

Stronger support from the international community is also needed to resolve debt distress, where exogenous shocks constrain countries’ abilities to meet their debt obligations. The Group of 20 Common Framework for Debt Treatments remains the main international debt relief mechanism available to the least developed countries and other low-income countries facing debt distress. The framework has, however, fallen short of expectations.

Only three countries have requested debt relief; none has concluded a restructuring since the framework came into effect over a year and a half ago. There is broad consensus that the framework

is not working, especially in providing pragmatic, swift, comprehensive and forwardlooking solutions for all countries facing debt distress. Such solutions must include a standstill in debt-servicing payments, engagement of official creditors with the debtor and with private creditors, and a clearly defined restructuring process. Beyond these immediate measures, an international statutory mechanism for sovereign debt restructuring needs to be established. There is also scope to improve lending contracts, for example, through State-contingent debt instruments or enhanced collective action clauses.

The world is at a critical juncture as it approaches the midpoint of the SDGs. A number of entities have estimated the financing requirements for developing countries to reach the goals and address the climate crisis. Most predictions fall in a range amounting to several trillion dollars per year. Given already limited fiscal space in developing countries and growing needs for stimulating recovery and protecting the most vulnerable, these countries face significant challenges in making such investments. At the same time, favourable climate and SDG outcomes, initially realized through action in specific countries, can have significant positive spillover effects across the world. More robust international cooperation in mobilizing the resources needed to secure such outcomes is in the interest of all countries, developed and developing.

Anti-Microbial Resistance (AMR) is an evolutionary process of microorganism used in order to avoid destruction or death, usually through genetic changes micro-organisms leads no longer respond to medicines, making infections harder to treat and increasing the risk of disease spread, severe illness and death, however there are several driving mechanisms that accelerate this process, the main drivers for AMR Are:-

• Unnecessary medication

• Misuse of medicines

• Not completing full course of the medication and

• Overuse of antimicrobials

Which will leads to the development of drug-resistant pathogens. Other AMR cause are using of poor water quality, poor sanitation and poor hygiene practice, and also inappropriate food handling which provides drug resistant organisms can emerge, multiply and spread.

The consequence of Antimicrobial resistance is antimicrobials become ineffective, therefore infections has harder to treat by common antibiotic drugs, which will leads to see alternative drugs which are more expansive than the common antibiotics, require treatment for longer time and not treatable at all that lead to endangering of Medical procedures, such as surgery, chemotherapy or organ transplantation,

The cost of AMR drugs have a significant impact in economies at individual level it’s reduce productivity of patients or their caretakers and increase health care cost. At the health system level it could be high cost with treating prolonged illness results in longer hospital stays, the need for more expensive medicines and financial challenges for those severely complicated and prolonged intensive care.

AS WHO has been declared that AMR is one of the top 10 global public health threats which is a complex problem facing humanity, According to the review on Antimicrobial Resistance, commissioned by the UK Government, argued that AMR could kill 10 million people per year by 2050, despite of these forecasts

global burdEn of drug rEsIstanCE

have been criticized by some, WHO and numerous other groups and researchers agree that the spread of AMR is an urgent issue requiring a global, coordinated action plan to address.

As study conducted in a systematic analysis of Global burden of antimicrobial resistance in 2019 shown that the global burden on drug-resistant contributed about 1•27 million deaths. During the year of 2019, AMR would have been the third leading cause of death globally ahead of both HIV and malaria which is a great evidence of bacterial AMR is a leading global health issue. Additionally, the analysis showed that all six of the leading pathogens contributing to the burden of AMR in 2019 (E coli, S aureus, K pneumoniae, S pneumoniae, A baumannii, and P aeruginosa) have been identified as priority pathogens by WHO and among the 21 GBD regions.

Australasia had the lowest AMR death burden in 2019, whereas Western subSaharan Africa had the highest death burden associated with AMR. Although sub-Saharan Africa had the highest all-age death rate attributable to and associated with AMR.

In Ethiopia, as many studies revealed there were also an indication of misuse of antibiotics by drug consumer and bad practice of unskilled health care provider and practitioners without adequate diagnostic investigation that lead to AMR. Our ability to cure common diseases is still under danger due to the creation and spread of bacteria that are resistant to drugs and have developed new resistance

mechanisms. The increasing global expansion of multi- and pan-resistant bacteria, commonly referred to as "superbugs," which cause diseases that cannot be treated with current antimicrobial medications, is particularly concerning, so to prevent AMR, it needs a multi sectorial approach of which, WHO’s global action plan framework set strategic objectives, which are improving awareness and understanding of AMR through effective communication, education and training, strengthening knowledge and evidence base through conducting surveillance and research using highly advanced diagnostics center and techniques to develop new treatment, diagnostic tools and vaccines that studies help to address effective antimicrobials or alternative approach. Additionally, stopping inappropriate dispensing and prescription practice before laboratory investigation in health organizational system to promote appropriate use of antimicrobial using evidence based interventions via establishing a legal and regulatory framework to ensure rational utilization of antimicrobials that can be done by sustainable investment and increase investment in highly accurate and reliable diagnostic tools.

Being involved in altering this globally challenging heath problem as contributing a revolutionary advanced diagnostic approach can promote the health of the individual and the community as a whole.

Swiss Diagnostics Ethiopia, contributes to reach in a highly advanced clinical management decisions on treating and early prevention of AMR that are guided by accurate and timely diagnostic results approach system via providing a meaningful result of antimicrobial susceptibility data, and also support accurate AMR surveillance data to inform empiric treatment guidelines and to develop control strategies, including infection prevention and control. SDE also contribute in Monitoring the Progress of AMR strategies through implement and involvement in more up-to-date diagnostic clues for research and surveillance activities as needed to achieve AMR objectives.

afriCan banKEr awards 2023 noMinEEs announCEd

The 2023 edition of the Awards ceremony is set to spotlight SMEs, women and gender. A new category has been introduced to recognize efforts towards bolstering financial inclusion of women across the continent.

Since their inception in 2007, the African Banker Awards aim to recognize the exceptional individuals and organizations driving Africa’s rapidly transforming financial services sector. The winners of the African Banker Awards will be announced during the official gala ceremony taking place 24 May, in Sharm El Sheikh, Egypt, and part of the official program of the African Development Bank Annual Meetings. The 2023 edition of the African Banker Awards is being organized by African Banker and IC Events. The ceremony will be sponsored at platinum level by the African Guarantee Fund (AGF) and at associate level by the Trade and Development Bank (TDB) and Tunisia’s Caisse des Dépots et Consignations, that is managing an important project to support start-ups and SMEs.

This year's Awards gala is poised to accentuate the theme of gender equity in the industry, as demonstrated by the substantial proportion of female candidates vying for the coveted title of Banker of the Year. In addition, in partnership with the African Guarantee Fund, a fresh accolade has been instituted to acknowledge and encourage initiatives aimed at propelling financial inclusivity for women across the African continent, the AFAWA Bank of the Year award. AFAWA (Affirmative Finance Action for Women in Africa) is a pan-African initiative to bridge the $42 billion financing gap facing women in Africa.

The African Banker Awards nominees were selected from a record number of entries, representing the entirety of the African continent, over a total of 10 categories, and shortlisted by the Awards committee. The nominees for the African Banker Awards 2023 are:

Banker of the Year:

1. Mr Admassu Tadesse - Trade and Development Bank

2. Prof Benedict Oramah – Afreximbank

3. Ms Esther Kariuki - Co-operative Bank of Kenya

4. Mr Moezz Mir - SBM Bank, Kenya

5. Ms Mukwandi Chibesakunda - Zanaco, Zambia

6. Mr Othman Benjelloun - Bank of Africa

7. Ms Yemi Edun - First City Monument Bank

Bank of the Year:

1. Afreximbank

2. Bank of Africa

3. Co-operative Bank of Kenya

4. CRDB Bank – Tanzania

5. The Mauritius Commercial Bank

6. Trade and Development Bank

7. Trust Merchant Bank, Democratic Republic of the Congo

Sustainable Bank of the Year:

1. Absa, South Africa

2. Commercial International Bank, Egypt

3. Nedbank, South Africa

4. Rand Merchant Bank, South Africa

5. Trade and Development Bank

DFI of the Year:

1. Afreximbank

2. Africa Finance Corporation

3. Arab Bank for Economic Development in Africa: BADEA

4. Lesotho National Development Corporation

5. Trade and Development Bank

Fintech of the Year:

1. Ensibuuko Technologies, Uganda

2. Flutterwave, Nigeria

3. JUMO World, South Africa

4. Lulalend, South Africa

5. MFS Africa, South Africa

A panAfrican initiative to bridge the $42 billion financing gap facing women in Africa.

SME Bank of the Year:

1. Absa, South Africa

2. Caisse de compensation et de consignation, Tunisia

3. CRDB Bank, Tanzania

4. Ecobank, Senegal

5. KCB Bank, Kenya

Deal of the Year – Debt:

1. EUR174m (US$190m) investment in the 44MW SingroboAhouaty Project – Africa Finance Corporation

2. R1.143bn (US$66.13m) gender-linked bond (“GLB” issuance across 3-year and 5-year tranches for Barloworld Limited– Rand Merchant Bank

3. US$564m equivalent private placement green bond issuance for GrowthPoint - Absa

4. Harmony Gold Company syndicated multi-tranche, multi-currency, loan facility of US$400 million and R4 billion– Absa & Nedbank

5. Dual currency USD 292.4 Million, and EGP 1.9 billion Syndicated Long Term Facility (US$400m) to the Egyptian Chemical Industries Company (KIMA) –National Bank of Egypt

Deal of the Year – Equity:

1. Advisory on the US$2.5bn initial public offering (IPO) of ADNOC Gas - EFG Hermes

2. US$47m investment in Africa Go Green - International Finance Corporation (IFC)

3. US$298m Infinity Energy equity investment and Lekela Power acquisition - Africa Finance Corporation

4. R892m (US$55m) acquisition of Windlab Africa’s wind and solar assets I partnership with Seriti ResourcesRand Merchant Bank

5. R8.9bn (US$550m) evergreen B-BBEE transaction f or Shoprite– Rand Merchant Bank

Agriculture deal of the Year:

1. Launch of a first-of-its-kind AgriHarvest Platform –Rand Merchant Bank

2. US$100m working capital trade finance facility to Export Trading Group (ETG) - Trade and Development Bank

3. 8bn EGP (US$266m) Syndicated Long-Term Loan Facility for Evergrow - Banque Misr

4. Syndicated Long Term Facility US$161m General Authority for Rehabilitation Projects & Agricultural Development (GARPAD) - National Bank of Egypt

Private and confidential