Category: Business

Having the International Financial Reporting Standards (IFRS) compliant financial statement would be beneficial to participate in the capital market, according to the Ethiopian Capital Market Authority (ECMA).

IFRS bring transparency by enhancing the international comparability and quality of financial information, enabling investors and other market participants to make informed economic decisions.

Accurate financial documentation is also necessary to measure important metrics, including debt-to-asset ratios, which investors use to evaluate how effectively companies pay down debt and generate revenue.

ECMA Director-General Brook Taye told ENA that the most important element IFRS compliant are not necessarily for anybody but for the company itself because it would let you know and understand the true value of your company.

“IFRS bring its new ways of understanding the value, measuring the value of a company.” So, the first beneficiary of IFRS is the company itself.

The director-general elaborated that by adopting IFRS private companies would ultimately know the true value of their company. And knowing the true value of a company as an owner is very beneficial as you know where you stand.

Also, IFRS are crucial for financial statements to be consistent, reliable, and comparable between every business in any country.

“IFRS’s main purpose and benefit are for the companies themselves. That is the primary benefit and it would allow for example if they want to participate and list in the capital market. Then having the IFRS compliant financial statement would be beneficial because you would know the true extent of the companies’ performance.”

For investors, he affirmed the standards give some confidence that the company has been properly recording its performance, paying its taxes, and the asset valuation of many properties that company have.

In general, the IFRS is important for the overall economy, Brook noted.

The process of realizing a capital market in Ethiopia is well underway in order to ensure the existence of a functioning market soon, it was learned.

The capital market is a financial system that allows private and public institutions to buy and sell equity and debt instruments companies to raise long-term funds through the sale of securities such as stocks and bonds.

Source: Ethiopian News Agency

The improvement of the Water, Sanitation and Hygiene (WASH) sector in Angola requires an annual investment of about 10 percent of the General State Budget (OGE).

This estimate, which aims at equity and sustainability in Water, Sanitation and Hygiene services, is expressed in a UNICEF project to which ANGOP had access, whose public presentation is scheduled for March 28 in Luanda, as part of the celebration of the World Water Day.

The draft sets out this estimate based on the “Africa Infrastructure Country Diagnostic (AICD), which states that African countries should allocate 3.5% of their Gross Domestic Product to the Water, Sanitation and Hygiene sector to achieve equity and sustainability in these services.

Recommendations

For the efficiency of the ASH, UNICEF recommends that Angola develop and approve a National Strategic Plan for Water Supply and Sanitation, future-oriented financial instruments that ensure the alignment and involvement of stakeholders in decision-making.

To improve the sustainability of the sector, WASH also suggests creating additional sources of finance, including private sector investment, and increasing sanitation standards, coverage and budget.

To increase the effectiveness of public spending in the Water, Sanitation and Hygiene sector, it further advises investing in administrative modernisation and operational digitisation, improved performance monitoring and results-based budgeting, as well as continued accountability and transparency of the national budget.

Obstacles

The project presents obstacles linked to regulation and strategy, precisely the “lack of connection between priorities and financial needs, even though national plans exist” and defined goals are not directed transparently at specific institutions”.

Still on the obstacles linked to regulation and strategy, the project indicates that “future funding is very unpredictable, with no long-term funds for the sector”.

It points to the existence of a clear delimitation of roles, responsibilities and relationships between institutions, as well as the need to create clear and transparent mechanisms for effective coordination and implementation of the sector.

On the other hand, the project, which resulted from an analysis, concluded that the budget for Water, Sanitation and Hygiene in Angola is mainly made up of “Water Supply”, which in 2022 consumed 73.8% of the total foreseen, and this year it is foreseen 74.1%.

Basic sanitation comes next with 26.2 percent in 2022 and forecasts 25.7 percent for 2023, a significant increase compared to 2021, which was 12 percent.

The budget includes “Water Supply”, “Sewerage”, “Waste Management”, and “Wastewater Management”, however, since 2020, these last two items have not been included in the State Budget.

The money for WASH is mostly administered by the ministerial departments of Environment and Energy and Water.

The annual growth of the Angolan population is estimated at 3% (34 million inhabitants), another detail highlighted in the analysis as a tremendous challenge for water supply, sanitation and hygiene infrastructures throughout the country.

Objectives

The UNICEF project consisted of conducting analysis of the challenges facing the water, sanitation and hygiene sector in Angola through a Public Finance perspective.

It aimed to understand how government funds have been allocated to the sector over the past 10 years to provide a tool to improve budget allocation and a mechanism through which stakeholders in the sector can better understand national spending.

Source: Angola Press News Agency (APNA)

The Council of Ministers has decided to raise the authorized capital of Ethiopian Railways Corporation (ERC) to 221 billion Birr, according to the Office of the Prime Minister.

In its regular session today, the council instructed the ERC to complete infrastructures under construction and to make the completed ones operational.

The regulation on the corporation would accordingly become effective from the date of its publication on the Negarit Gazette.

Moreover, the council discussed various issues and referred proclamations to the House of People’s Representatives (HPR) for endorsement, it was learned.

The council also discussed a draft proclamation on public enterprises. The bill is aimed at ensuring the transparency and accountability of the corporate management system of public enterprises, strengthening their competitiveness and efficiency through modernizing their corporate finance management system.

The bill is expected to improve the debt burden of the enterprises so that they can effectively discharge their social responsibilities without affecting their profitability.

More importantly, it enables the state-owned enterprises to contribute to the country’s economic development, it was learned.

The council referred the draft proclamation to the House of People’s Representatives for endorsement.

The other draft bills tabled for discussion were proclamations designed to approve the agreements Ethiopia has concluded with the Luxembourg government and the Swiss Confederation for avoidance of double taxation and tax evasion prevention.

During the discussion, it was noted that the proclamations have significant contributions towards encouraging investors to invest their resources in Ethiopia.

The bills were subsequently referred to the House of People’s Representatives for approval.

Source: Ethiopian News Agency

The secretary of State for Agriculture and Livestock, João da Cunha, considered today, in Luanda, the need to carry out more detailed studies of the soil to guarantee the suitability of the land available for the National Plan for the Promotion of Grain Production (Planagrão).

Speaking about the land description in the provinces of Lunda Norte and Lunda Sul, for the production of maize, rice and soy and other products, he stressed that, of the visited lands, visible observation allowed him to have an idea and to affirm that they are lands with agricultural potential.

João da Cunha said that they are initiating contacts with Agricultural Research Institute, in order to be able to travel to the two provinces and start collecting soil samples from the spots “that have already been identified to carry out the analyses. It is an extremely important step, because human eye is not enough”.

He recalled that it is the responsibility of the governments of the selected provinces (Lundas Norte and Sul, Cuando Cubango and Moxico) to identify, in their respective territories, the land available to be valued and used within the scope of the Planagrão.

“These lands are in provinces where the population density is relatively low and most of all, according to what was confirmed to us by the governors, are free lands, where the State can perfectly use them for the purpose for which it proposes”, he emphasized.

On his turn, the secretary of State for Economy, Ivan dos Santos, reinforced that the spots were identified, with the help of provincial governments and local authorities, as a result of a history of using these lands for the cultivation of selected cereals.

In the Municipality of Lóvua, Province of Lunda Norte (north-east), its history is conducive to the cultivation of corn and soybeans, therefore, provincial governments and local authorities selected these spots.

Regarding conditions for the preparation of a study of the Planagrão’s value chain, he stressed that “there is a need to prepare a study, being a new and challenging plan, but with a lot of opportunity for the private sector”.

“We are on schedule, we believe that we will be able to meet the schedule to ensure that the implementation of the plan has the intended success. In the multisectoral commission, we decided to implement the study, because it is in the State’s interest that our private sector be successful in implementing projects”, he emphasized.

He said that, after identifying the 130,000 hectares available for starting Planagrão in Lunda Norte, and 56,000 hectares in Lunda Sul, the teams are processing all hectares, in terms of land extension, and the access roads to evaluate the effective cost, mainly of the infrastructures.

Approved by Presidential Decree 200/22, of July 22nd, the plan foresees an average annual investment of around US$670 million for the production of wheat, rice, soy and corn grains, among others.

The State will provide kz 2.852 billion (USD5.6 billion) for the programME, with kz 1.6 billion (USD2.9 Million)to finance the private sector, provided by Banco de Desenvolvimento de Angola (BDA) and the Fundo Activo de Capital de Risco, (FACRA) – Venture Capital Active Fund.

The remaining 1.17 billion kwanzas will be channelled towards infrastructure, which includes the demarcation of two million hectares, allotment and access roads to the production areas.

The Planagrão foresees an average annual investment of around US$670 million for the production of wheat, rice, soy and corn grains, among others, and around US$471 million/year for the construction and rehabilitation of support infrastructures to the productive and social sector.

Source: Angola Press News Agency (APNA)

The process of realizing a capital market in Ethiopia is well underway in order to ensure the existence of a functioning market soon, Ethiopian Capital Market Authority (ECMA) Director-General Brook Taye said.

In an exclusive interview with ENA, the director-general said what the authority has been doing is establishing the necessary legal parameters that allows to start the market and become operational.

The authority has finalized and issued three different directives, according to Brook. Those are “capital market service provider’s directive, exchange directive, and self regulatory directives which would allow us to start issuing the necessary licenses to market participants.”

Under the capital market service provider directive, for instance, the authority will be licensing brokers, dealers, investment banks and advisors as well as several types of market participants, he added

The director-general stated that ECMA has “received excellent feedbacks from a lot of people who are experts in this field and we are finalizing those directives and providing the final version for adoption.”

Stressing that significance of structuring the institution, he said that ECMA has been structuring the authority in different areas, including hiring qualified human resource, alongside its priority of designing a five-year strategy.

With regarding to its mandate, its priorities are supporting “the market, investors, and focusing energy getting investors ready to participate in the market.”

The overall “process is progressing well based on our time line that we shared with our Board. And we are going to deliver on commitment to make sure that Ethiopia would have functioning capital markets very soon,” Brook elaborated.

Obviously, as a new institution, there are a lot of challenges that need to be overcome; but we will deliver on our commitment and the responsibility that the authority has.

Recalling that one of the major commitments of the government is to make sure that there is macro-stability, the director-general underscored that when you envision macro stability that means you try to focus on having a market mechanism to mobilize resources.

The Ethiopian Capital Market Authority (ECMA) was established in June 2022 by the National Bank of Ethiopia.

Source: Ethiopian News Agency

The Ethiopian government is striving to enhance responsible agricultural investment that can meet nationally, regionally, and internationally accepted principles, according to Ministry of Agriculture.

In his opening remark at the National Multi-Stakeholders Dialogue on Responsible Governance of Investment in Land underway here in Addis Ababa, Agriculture State Minister Ifa Muleta said land in Ethiopia is not only the foundation of the economy, but also plays significant role in cultural, social, and political affairs.

The Government of Ethiopia is, therefore, carefully looking for a long-term sustainable land use system which enables it to design a guiding policy framework that addresses both small holders and commercial ones.

According to him, the government has demonstrated strong commitment to agriculture in order to increase production and productivity of small holders through dissemination of effective technologies and scaling up strategies.

As a result, considerable achievements have been registered over the past decades even if there is still substantial scope to improve production, productivity, and to also create untapped market linkages, it was learned.

“We are striving to enhance responsible agricultural investment that can meet national, regional and international accepted principles and guidelines in an innovative and responsible ways. Indeed, establishing responsible agricultural investment system in the main objective of our current reform agenda in the sector land governance is a crucial issue.”

Responsible Governance of Investment in Land Project Manager, Christian Mesmer said land is a finite and non-renewable resource that many found significance in economic, social, ecological, cultural and political terms. Due attention must (therefore) be given to this precious resource from national to kebele level.

The manager noted that the global rush for land indicates that many land owner local communities do not benefit from land investment.

Christian added that the lack of safeguarding and consultation mechanisms in doing land allocation process result in land degradation, dispute and evictions.

“With its agricultural reform agenda, the Government of Ethiopia has demonstrated its commitment for good land governance through improved land tenure security for both small holders and commercial agricultural investment and alike,” he stressed.

Many systematic efforts have been undertaken, the manager stated, adding that the country can still make major headway in ensuring responsible agricultural investment.

EU Delegation Green Deal Team leader, Roberto Schiliro said on his part that land governance is a precondition for any development policy and strategy in agriculture.

This is particularly important in Ethiopia to fully exploit its unleashed potential, the team leader said, adding the UN and its member states have taken various measures, including the adoption of UN land policy guidance in 2004, in order to meet these objectives.

The EU supports this initiative acknowledging that responsible land management is a key and critical issue in Ethiopia, according to Schiliro.

The team leader further underlined that we need to have specific Ethiopian approach. “We need to be inclusive and innovative in the approach to land management in Ethiopia.”

Source: Ethiopian News Agency