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Month: August 2022

Identify, Develop the Brave. Otherwise Become Athletics History

Posted on by Web Master

On one of the recent Saturdays, I went out with a friend for a walk. My plea for the rain heeded, we quickly paced the wet streets as though we were late from a very serious appointment. It was six o’clock in the morning.

It was a change from my usual walking hours of six o’clock in the evening. My friend had insisted and I agreed to accompany him. It is a daily feat for him. The walk’s pace immediately progressed to a run, a department in which I am no match. It was then I came to the conclusion that we would not be able to have a conversation under the circumstances. I was too out of breath, not to mention lagging far behind.

The stubborn factors that make or break athletes started to linger in my mind. First arrived were the Olympic heroes Abebe Bikila and Mammo Wolde, as I pondered whether enough books were written in local languages about their lives and achievements. Then came our elementary school days, when we took mandatory physical education (PE) courses as a subject every semester. Nothing used to happen during classes, and many considered them recess time. To our surprise, we also took PE during college freshman semester as a compulsory course. The courses made one thing clear; athletics is for those who endure its vagaries.

If somebody is involved in a certain kind of sport, other than athletics, one could most certainly guess where they reside in Addis Abeba, or how close one’s residence is to sports’ centres or playing fields. Of course, soccer is for everyone, regardless of whether any facilities are available. Everybody, at least boys, tries their hand at soccer, although few become professional players.

The next topic that brought headache, combined with the cold, during my morning walk-cum-run was the result of the World Athletics Championship, which was held in Oregon, United States. The flow of medals for Ethiopia was there, which finished second by dominating long-distance track and marathon, especially in the women’s grouping. However, it was a win at an event that was not anticipated, as admitted by athletics officials. Sure, the national team’s under-20 performance at Cali, Columbia, was also reassuring. Yet, something continued to nibble away at me.

As there are positives to becoming more competitive in the middle distances, what has been considered our home turf, long-distance track, is slipping away, especially in the male lineup. More and more athletes around the world in the long distances are becoming world-class. It is not only the Kenyans or the Eritreans these days but the Europeans as well that have Africans by origin competing under their flags.

Many athletes have gone as many are coming and more are certainly going, and things are going to get tougher. There is no question about it. It looks like we have to be prepared for the worst instead of mediocrity and triviality-laden self-satisfaction or complacency the events enjoy here. The way most accomplished athletes were beaten suggests that there is overwhelming pressure coming from up-start countries in the long-distance arena. They have their sights on the Olympics beyond the World Athletics Championship.

What is at stake is not only losing world-class runners but enthusiasm for the race as a whole. A lot of work needs to be done to identify and develop talent from a young age. Beyond that, it needs to be a national effort to retain potential athletes in the country. It is not just a brain drain we are facing but also a talent drain (not that athletes are not savvy, with skills they have demonstrated in business). It takes a special disposition to brave the cold or the sun; those of us that take part in morning runs once in a while know all too well.

Sustainable Agriculture as Hidden Gem for Diaspora Investment

Posted on by Web Master

As a member of the Diaspora, I can speak here with first-hand knowledge: any investment requiring frequent trips outside of Addis Abeba is off the table for most of the Diaspora community. Farming is not even in the conversation when people discuss doing business in Ethiopia. Real estate and the import of commodities and raw materials are the main activities discussed as an investment.

Why? Well, these investments are relatively risk-averse and highly liquid. At the same time, such investments have low or sometimes an adverse impact on the overall economy and our compatriots who are most in need. As Diaspora, if we are successful and invest in our homeland, we should not engage in low-impact investment; we should try to have as much impact as possible to make the road to success more accessible for the next generation.

The Diaspora have an opportunity to combine our knowledge and social and financial capital to change the foundation of Ethiopia’s economy. In 2019, the country imported about 18 billion dollars worth of goods and exported about three billion dollars – Ethiopia is a net importer. Considering the arable land, water resource and favourable climate, there is no reason why we cannot become a net exporter.

When spending 100 million Br on building a 10-storey apartment building with three apartments a floor, one creates housing for 30 people and jobs for the surrounding community during the construction phase. Of course, there is also steady income for the investor for the life of the apartment. But suppose the person invests 100 million Br into regenerative farming, after a growing phase of three to four years. In that case, the investor can potentially secure a source of foreign currency from exports for the next half a century, depending on how the farm is designed. Permanent jobs are also being created for the rural farming communities, which likely did not have many job opportunities previously. The investor is also benefiting the climate positively while educating the neighbouring farmers about modern farming techniques and market knowledge.

Considering the recent breakdown in global supply chains, Ethiopia needs to utilise its natural advantage in regard to agriculture. We have almost one million square kilometres of arable land, abundant water resources, and a young and motivated labour force. Ethiopia could be the bread and veggie basket for Africa and Europe.

Diaspora investors in Ethiopian agriculture ought to implement regenerative agricultural practices championing the smallholder farmer to become a larger and more important part of the value chain. The Ethiopian Diaspora community should be galvanised and inspired to revisit regenerative farming as a high-impact, high-reward investment by demonstrating and being a model farm developer.

Smallholder farmers mainly maintain sustenance farming, mostly on rain-fed farmland (farmland that is only irrigated when it rains, which is about five to six months of the year). Considering climate change and the increased frequency of irregular rain patterns, it will be a very ineffective use of farmland. I realised that if I can empower, train, and equip smallholder farmers with the necessary knowledge and know-how, we can change the lives of not only the farmers we work with but the next generation of farmers. We need the next generation of farms to not only feed the country but also produce surplus and begin to feed the ever-growing population worldwide.

After successfully developing a 13-hectare plot of land using agroforestry as the guiding agricultural strategy, I believe that my team is ready for the next phase of development. We are surrounded by about 200 smallholder farmers who have also planted avocado plants. In June 2022, we had our first export shipment to the Saudi Arabian market. I bought avocados from the surrounding farmers at almost 0.80 dollars a kilo and sold them for about 2.25 dollars. Considering packaging and transportation cost, there really is no profit to be made. But the profit is in the market knowledge and export know-how gained throughout the process.

To further the cooperation between the surrounding famers and myself, I have requested the local government to create a farmer’s union or cooperative. This will allow for a more formal relationship between the farmers and myself. It will allow me to share resources, knowledge, and experience with the cooperative versus each individual farmer, which is obviously more efficient. Forming a cooperative is also important for volume estimations, export markets focus on volume and consistency. If a supplier cannot consistently supply the buyer with high-volume, high-quality goods, they will be pushed out of the market. Cooperatives help to facilitate the sharing of knowledge and resources, volume, and quality management, and also community development.

I am a living example that the Diaspora can add value and that promising returns could be generated from the agriculture sector.

My new farm will be established as a nucleus-state integrated syntropic farm. We plan to mix animal husbandry and agroforestry to create an integrated farm that produces zero waste and has a diversified source of income. When developing the farmland, we will emphasise two main points: creating a world-class integrated syntropic farm using permaculture design that focuses on scalability and profitability, and creating a resource centre for communities in and around the area of the nucleus state farm. The centre will serve as a one-stop shop for the surrounding farmers. It will include seeds, seedling nursery, chemicals, tractor services, knowledge and technical information and a small pilot project for demonstration purposes.

The community resource centre will function as an “Agricultural Hub” for that community, a place where the rural farmer can come and learn, share experience, and purchase resources on a credit basis. It will also serve as the first point in the all-important cold chain for that community. We will establish a cold warehouse on its nucleus state farm that will provide space for storage, sorting, and grading of all produce harvested for both local and export markets.

Eventually, the rural farmers utilising the resource centre will become partner farmers in executing a coordinated out-growers scheme serving local and export markets. We will collaborate with farmers, aggregate the harvested produce and store it in the cold-house for further processing, later providing cold-truck transportation to local markets in Addis Abeba and facilitating cold-truck transportation for the export market.

Thus, the centre will provide a one-stop shop for the rural farmer for all their agricultural needs. It will serve both my farm and the partner farms without distinction to engrain itself and become part and parcel within the community.

Farming is mainly about patience, persistence, being consistent and not taking any shortcuts. It can be likened to building a large building. When digging the foundation of the building, one will do as such until reaching an incompressible layer of soil. Why? Because they want to make sure that once the building is complete, it can withstand both the dead and dynamic load it may face in its 40–60-year life span. Farming is similar. When planting a fruit tree with a life span of 30-40 years, the person should not supplement its growth with chemical fertiliser. Chemicals might seem like the quickest and easiest way to profitability, but they produce such long-term consequences as soil erosion, loss of biodiversity, input dependence, and eventually lifeless soil.

The influence of the Ethiopian Diaspora will enhance and benefit people’s lives and not degrade them.

Why Commodity Prices Will Likely Fall Further

Posted on by Web Master

Big movements in the prices of oil, minerals, and agricultural commodities have been among the most salient economic developments of the past couple of years. The sharp rise in commodity prices for much of this period was virtually impossible to miss. A barrel of Brent crude that sold for 20 dollars in April 2020, during the first wave of the COVID-19 pandemic, fetched a peak of 122 dollars in March 2022, just after Russia invaded Ukraine.

Oil was not the only commodity to experience a price surge. The price of copper doubled; wheat more than doubled; and global indices of commodity prices almost tripled from April 2020 to March 2022. And these increases are in dollar terms; prices in euros, yen, won, or other currencies rose even more.

Less widely noted, however, is that the prices of many commodities fell this summer. The price of oil decreased by about 30pc between early June and mid-August. The politically sensitive price of gasoline in the United States fell by 20pc over the same period, from five dollars per gallon to four dollars per gallon. The overall index fell 12pc.

Is this dip in commodity prices just temporary? Or is it a sign that prices have peaked and can be expected to decline further?

Commodity prices are highly correlated. One reason is direct microeconomic linkages. When the price of oil rises, wheat producers’ costs increase (because harvesting equipment runs on diesel and fertilizer is made from natural gas), which puts upward pressure on grain prices.

There are two macroeconomic reasons to think that commodity prices in general will fall further. The level of economic activity is a self-evidently important determinant of demand for commodities and therefore of their prices. Less obviously, the real interest rate is another key factor. And the current outlook for both global growth and real interest rates suggests a downward path for commodity prices.

Not all prices will fall. Different commodities tell different stories. For example, the market price of natural gas in Europe is bound to rise further as the continent learns to manage winter without Russian supplies. But the trend will likely be downward elsewhere.

Strong global growth, especially in China, can explain the major commodity-price upswings of 2004-07, 2010-11, and 2021. Conversely, plunging global growth can explain the abrupt falls in commodity prices during the Great Recession from mid-2008 to early 2009 and during the pandemic recession from January to April 2020.

Global growth is currently slowing. China’s economy has faltered dramatically. Growth there actually turned negative in the second quarter, as Shanghai and some other large cities endured lockdowns pursuant to President Xi Jinping’s futile zero-COVID policy. Europe’s economy will be hit hard by side effects of Russia’s invasion of Ukraine.

Even US growth is slower in 2022 than it was last year, with many proclaiming that a recession has begun. Personally, I am still willing to bet that no US recession started in the first part of the year and that either first-quarter or second-quarter GDP will be revised upward by the end of September.

In its most recent update, the International Monetary Fund (IMF) projected global growth to slow sharply, from 6.1pc in 2021, to 3.2pc in 2022 and 2.9pc in 2023. Slower growth means lower demand for commodities, and hence lower prices.

Moreover, as the US Federal Reserve and other central banks tighten monetary policy, real interest rates are likely to rise. This will probably push down commodity prices, and not just because high real interest rates make a recession more likely. The level of real interest rates affects commodity prices independently of GDP, both in theory and empirically.

The theory of the relationship between real interest rates and commodity prices is long-established. The simplest intuition behind the relationship is that the interest rate is a “cost of carrying” inventories. An increase in the interest rate reduces firms’ demand for holding inventories and therefore lowers the commodity price.

Three other mechanisms operate, in addition to inventories. First, for an exhaustible resource, a rise in the interest rate increases the incentive to extract today and thus expand the available supply. Second, for “financialised” commodities, an increase in the interest rate encourages institutional investors to shift out of the commodities asset class and into Treasury bills. Lastly, for a commodity that is internationally traded, an increase in the domestic real interest rate causes a real appreciation of the domestic currency, which works to lower the domestic-currency price of the commodity.

Econometric analyses have demonstrated the statistical relationship between real interest rates and commodity prices. These include simple correlations; regressions that control for other important determinants, such as GDP and inventories in a “carry trade” model; and high-frequency event studies that are much less sensitive to the econometric problems of the regressions.

Two episodes illustrate that the effect of real interest rates on commodity prices operates independently of the GDP effect. Neither the spike in dollar commodity prices in the first half of 2008 nor the decline in 2014-15 can be explained by fluctuations in economic activity. They can instead be interpreted as the result, respectively, of loose US monetary policy (quantitative easing) and a tightening of US monetary policy with the end of QE.

Real interest rates appear to be on a firm upward trend because nominal interest rates will rise, and inflation will fall. Together with decelerating global growth, that could mean that the recent decline in real prices of oil, minerals, and agricultural products will persist.

Office Dinosaurs Meet Job Hoppers

Posted on by Web Master

It is fascinating how some people stay at a single company for years, and in some cases decades.

How is it possible to be doing the same thing every day, without getting bored or wanting to change? How do people that do manual, repetitive work every day manage?

The majority of people find themselves doing something they would not be doing had they not needed the money. Some enjoy what they do but also appreciate the financial compensation that comes with it. There is a small number of people who just do what they love despite earning very little from it.

All my life, with very few exceptions, I worked as a freelancer and I have enjoyed the freedom that comes with it. It also provided me with the right balance between work and other things that matter to me, like family and social engagements.

It is true that being a permanent employee has lots of benefits, especially the safety that whatever the performance, the proverbial check is mailed every month. It could be tempting. But at the end of the day, it means that big chunks of our lives are spent on work, especially the sort that demands we work more than eight hours a day.

Everyone is different; some people tend to like the stability and comfort that comes with knowing exactly what they do and how to do it. Some think perfecting an ability takes time and they disagree, saying that they are crafting their skills and learning new things daily.

“My job doesn’t suck as much as you think,” they would say.

It is a good thing we have those kinds of people, otherwise, imagine how disrupted the services we rely on day-to-day would have been, like banking, for instance.

I met this man the other day. He had been working in an organisation for three decades. I was speechless. He gave me a grin and said, “when I started the job, I was like you.”

“I said I’d stay here for a maximum of two years and here I am, almost waiting for my retirement,” he continued. “When I was starting out at the company, a senior told me this place will get you hooked. And It did. I stayed all these years because I was comfortable and I did not really want to step out of my comfort zone. Everything was stable and predictable.”

Now, he cannot imagine working at another company unless it is his own. I could tell that the man was content with his work. It was the kind of contentment one feels when they feel comfortable with the type of cards they have been dealt. It was not the other kind, where they are merely satisfied with what they do.

But, if we are not careful, and depending on the organisation, staying in one place doing the same thing for years could kill our creativity and hold us back from thriving. There has to be some kind of change no matter how small. And the change should include an actual modification of the job at hand, not just promotion or salary increments.

The opposite has a disadvantage too. Moving from job to job on a regular basis keeps us from knowing the job well and hinders our experience. It seems fun as it does not require long-term commitment, but if we want to become an expert, we have to dedicate our time and energy to a specific task. Both extremes have their disadvantages. Finding the right balance between perfecting skills and dull routine tasks out of fear of stepping out of our comfort zone is wise.

When Society Lies: The Truth Behind the Makeup

Posted on by Web Master

At gatherings, we often hear about others’ lives. The unfounded stories we are told have many assumptions and wrongful conclusions about a person. Many judge even people they do not know. They use their external metrics and what they hear to place a person on one level or another without thinking twice.

I have observed this on many occasions but one case stands out. When I was preparing for my wedding, one of the things I struggled with was selecting a makeup professional. I heard many opinions from people, making it difficult to choose. Finally, I settled on Marzel Makeup Studio because the samples seemed impressive.

Many people did not think it was a good idea. I was told that Marzel, the founder, belittles her clients. They said she is pricy and an angry, impatient person who intimidates people; a woman who is full of herself and does not respect her clients’ wishes.

When I first went to her studio, I never got a chance to meet the artist and had difficulty stepping across the floor as it was covered with a bunch of massive “thank you” flowers sent to her by happy clients.

I got to meet her for the first time in the middle of the night before my wedding day at her studio in Bole. I was scared a bit because of what people told me about her. And my face needed work. Before going to her studio, I could not sleep, weeping for hours in my room, with the thought that my late father will not be around on my wedding day. I went very sad and tired, but she welcomed me kindly. As I waited for her to finish her work on the bride before me, I observed how kindly she treated the brides who had flocked to her studio.

In just two hours of encounter, I came to know a very compassionate young person full of wisdom and character. She comforted me about the loss of my father. I felt like I was in a psychiatrist’s office getting counselling to get me through the big day. I came broken but left her studio with a huge smile and comfort.

After my makeup was done, she made me sleep on her studio couch so that I get some rest before my wedding started. As I lay there, I could not stop thinking about the difference between what I was told and what I found when I met her in person. I would not have found the strength on my wedding day if it was not for her wise words.

She advised me about her experiences, and that grief is a part of life. She told me the importance of prayer and being kind to oneself. She listened to my sadness with no judgment. She advised me it is “what now” that will help me heal rather than asking “why.”

Sometimes a person we met for a couple of hours inspires us so profoundly that they stay in our minds for a long time. It is especially surprising when it is a person we are told to shy away from by others. Unlike what I was told, she was patient, respectful, hard-working and punctual.

It turned out that none of the people who were putting her down knew her personally. They have never been her clients. I should not have been surprised.

We live in societies that make ludicrous assumptions and present them as fact. Rationality is becoming extinct. We should learn to admire and encourage talented people instead of creating wrongful stories discrediting their hard work. We should learn to talk about people’s achievements and appreciate them.

TRAGIC CRASH, AGAIN

Posted on by Web Master

A truck crashed into a house along the street that connects Wello Sefer to Bole Michael. The accident has killed and destroyed property. As concerned residents of the area look on, a crane machine gets rid of the debris. Accidents involving trucks are all but rare in Addis Abeba.

FLOODED ROADS

Posted on by Web Master

The current rainy season, like the one before it, has been harsh on residents of Addis Abeba. An example is pedestrians and drivers along Sierra Leone Street, where the road is practically flooded after a heavy pour. It clogged traffic and made it near impossible for pedestrians to cross.

LUCKY SAVERS

Posted on by Web Master

Emnet Alemayehu was one of the lucky winners of the Commercial Bank of Ethiopia’s (CBE) raffle competition to encourage saving. Held at its headquarters near National Theatre, in the central business district, on August 27, 2022, it was attended by Yinager Dessie (PhD) (left), governor of the National Bank of Ethiopia (NBE), and Abie Sano, CBE’s president. Emnet’s prize was an apartment.

IGAD Warns of Fifth Consecutive Poor Rainy Season

Posted on by Web Master

The Intergovernmental Authority on Development (IGAD) has warned that drought-affected areas in Ethiopia, Somalia and Kenya are likely to receive insufficient rainfall this year. It will mark a fifth consecutive failed rainy season, which falls between October and December and constitutes two-thirds of annual rainfall in the areas.

The UN called drought facing large swathes of East Africa the “worst in four decades.” The situation is likely to deteriorate in light of the latest forecast.

Last month, the United Nations Children’s Fund (UNICEF) warned the drought in Ethiopia’s east and south could turn into a full-blown famine without immediate action.

The agency says it is facing difficulties in sourcing financing and aid to back its humanitarian operations in the drought-stricken regions. It reports that severe acute malnutrition has risen sharply in these areas. There has been a 47pc increase in the Somali Regional State, according to UNICEF.

Finance Ministry Signs $165m Land Project Agreement

Posted on by Web Master

The Ministry of Finance has signed a 165 million dollar loan and grant agreement with the World Bank Group for the extension of a sustainable land management programme that looks to curb land degradation and improve productivity.

Ministry officials intend to implement the project in eight regional states including the Amhara, Oromia, Southern, and Sidama regions. They say the project will also reach the Tigray Regional State, although the nearly two-year-old civil war in the area flared up again last week.

The project is hoped to benefit four million people residing in 217 watersheds through sustainable land management activities. A third of the funding (58 million dollars) is sourced from the Green Climate Fund in the form of a grant. The balance is a long term loan from the Bretton Woods Institution.

The sustainable land management programme was first launched in 2008.