Welcome to Addis Fortune's weekly digest of the major economic and business news. This week's headlines feature the expansion of corridor-development plans into more weredas and coal miners in Oromia Regional State facing buyer blackouts. The hopes for integrated African trade have become contingent on domestic reforms.  In the construction sector, experts have formed a think tank to address industry issues while producers of biscuits, noodles, and animal feed are expressing concerns over taxing wheat prices.

Officials of the Addis Abeba City Administration are spearheading additional corridor-development plans that embrace more weredas, to transform the city into a "smart city," aligning with Prime Minister Abiy Ahmed's (PhD) vision. Led by the Plan & Development Commission, these efforts include collaboration with local universities to conduct comprehensive structural development studies. A temporary ban on issuing new building permits and land-related administrative services aims to ensure that new constructions align with the city’s comprehensive development plans. Studies by Civil Service and Addis Abeba universities focus on corridor development and Local Development Plans, integrating academic expertise into urban planning. Corridor development projects aim to reshape key areas into pedestrian-friendly and economically vibrant zones. Local Development Plans cover various city areas, proposing solutions such as car-free neighbourhoods, designated parking areas, and expanded pedestrian and bicycle lanes. Experts emphasise the long-term benefits of well-planned urban environments despite short-term costs. The involvement of universities and multidisciplinary teams underscores the comprehensive approach to urban development.

 
Local producers of biscuits, noodles, and animal feed are raising concerns over the escalating prices of wheat, urging policymakers to intervene. The Ethiopian Millers Association warns of potential closures for many factories if action is not taken promptly. With nearly 30 biscuit manufacturers and three major noodle manufacturers struggling, the impact of rising input costs is becoming increasingly evident. The plea for intervention coincides with the government's revision of the Value Added Tax proclamation, which last year included tax exemptions on products like wheat flour, spaghetti, and macaroni to combat inflation. However, concerns remain about the effectiveness of these exemptions in mitigating inflationary pressures. Noodle manufacturers argue for Value Added Tax reduction, emphasising the essential nature of their product for many low-income households. However, the Ministry of Industry suggests that biscuits may not justify Value Added Tax reduction due to their perceived economic contribution. The animal feed sector, reliant on wheat byproducts, faces its own difficulties. Despite assurances of refunds, the burden on production capacities amid wheat shortages and price hikes remains impactful.

 
The full embrace of the African Continental Free Trade Area faces slow progress on cross-regional payment systems, potential tax revenue losses, and underdeveloped logistics infrastructure. Experts highlight the need for domestic business changes to fully benefit from African Continental Free Trade Area, citing issues like limited access to finance, corruption, low industrial productivity, and reliance on primary commodity exports. Nuanced approaches are needed for foreign capital engagement due to recent openings of sectors for foreign investors. In preparation for the trial period known as the Guided Trade Initiative, industry players convened to address these impediments. Joining African Continental Free Trade Area depends on agreements regarding national sourcing criteria for textile and automotive products. While hopeful about Ethiopia's potential participation in cross-border financial infrastructure like the Pan African Payment & Settlement System, experts suggest thorough assessments are necessary. Logistical disparities among member countries persist, with concerns raised about delayed port clearance and freight forwarding protocols in Ethiopia.

The cement manufacturing sector's reduced demand has led to a surplus of coal in Oromia Regional State, with 125,000 tones awaiting buyers. Officials from the Oromia Mineral Development Authority are urging cement manufacturers and the Ministry of Mines to procure coal locally, aligning with the government's import substitution strategy. Abdulaziz Dawd (PhD) from the Oromia President's Office secretariat has requested cement manufacturers' assistance in establishing a market linkage with local miners highlighting declining royalty revenues for the region. However, the cement industry is concerned with impurity content and security issues. They suggest procurements are made based on quality and price considerations. Mining Minister Habtamu Tegegn is actively engaging with cement industry CEOs to replace imports with local supply. The Minister aims to enhance local mining capabilities and establish sustainable market chains. The decline in coal demand has impacted small-scale miners' livelihoods, with many struggling to sell their products despite obtaining licenses and concessions. While Ethiopia boasts substantial coal deposits, challenges such as primitive mining techniques and environmental concerns hinder industry growth. Experts emphasise the need for technology adoption before major policy changes.

 
Parliament establishes an 18-member think tank to address the construction industry woes within the country. Led by Hiyaw Terefe (PhD), the team aims to tackle pressing issues such as unqualified professionals, lack of bridge financing, reliance on imported materials, and deficiencies in existing laws. The initiative follows the presentation of four research papers that shed light on these issues and sparked a lively discussion among industry leaders. Contemporary regulatory frameworks were called to support the ambitious national infrastructure projects outlined in the 10-year strategy. Experts emphasised the need for audits, design reviews, and local sourcing of construction inputs for long-term sustainability. During a panel discussion, stakeholders discussed improved procurement procedures, practical training, and the wider application of Public-Private Partnership models. While the establishment of the think tank and the drafting of a 'mother law' for the industry show promising steps, some industry observers remain sceptical. They believe that deep-rooted structural issues and inflation may require more comprehensive solutions beyond academic interventions.

that’s all for today. We’ll be back with more updates next week. 
May good luck and fortune always be with you.