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Ethiopia’s new diaspora bond: will it be successful this time?

Sonia Plaza's picture

According to the latest issue of the Economist, diaspora bonds an idea worth trying. Ethiopia recently announced the launch of its second diaspora bond: “Renaissance Dam Bond”.

The proceeds of the bond will be used to fund the construction of the Grand Renaissance Dam. This dam will be the largest hydroelectric power plant in Africa when completed (5,250 Mega Watts). The first one was called the Millennium Corporate bond, and was for raising funds for the Ethiopian Electric Power Corporation (EEPCO) . The first diaspora bond issuance did not meet the expectations. Sales were slow during the first months of offering despite the efforts of the Commercial Bank of Ethiopia and the embassies and consulates to sell them. Some risks that the diaspora faced were: i) risk perceptions on the payment ability of EEPCO on its future earnings from the operations of the hydroelectric power; ii) lack of trust in the government as a guarantor; and iii) political risks.

Ever on the brink of disaster

Fred Owegi's picture

Farmers guide their livestock in the arid region of Mandera, Kenya

Earlier this month, I participated in a four-day mission to Mandera, a county in northeastern Kenya, some 640 km from Nairobi on the Somali border. The European Commission’s Humanitarian Agency (ECHO) arranged the mission to assess progress of various community-managed drought risk reduction initiatives.

We visited several projects being implemented across Mandera’s central, northern and eastern districts, an area which is home to more than a million people, according to the last census in 2009. The area is classified as arid and receives on average 250 mm of rainfall in a good year. But for the last several months, not a single drop of rain has fallen and all water reserves have been depleted. Famine could be imminent in Mandera and its neighboring counties if policies are not put in place to prevent it.

Being my first visit to Mandera the mission was eye-opening but also disquieting, coming as it did in the midst of what is now accepted as “the most severe drought in the Horn of Africa in the last 60 years”.

Of Legitimacy and Flash Mobs

Sumir Lal's picture

For those of us committed to democracy and interested in matters of governance and citizen accountability, the theatrics in India involving the anti-corruption crusader Anna Hazare pose a neat little dilemma. For, we love freely-elected governments and positively swoon over articulate civil society advocates, and here we have a situation where the two are in a head-on collision. So who’s the good guy? Whose side should we be on?

Hazare is pushing an anti-corruption bill that would give immense (possibly corruption-inducing and governance-disrupting) powers to an unelected ombudsman. The government is countering with a version that would keep key functionaries out of the ombudsman’s purview, arguably defeating the very purpose. Take your pick.

Protecting the Minnow - Lesotho Economic Update

As uncertainty increases about where the global economy is headed and whispers grow about a “double-dip,” spare a thought for Lesotho.

A small developing country (population less than 2 million), Lesotho is located in one of the most resource-poor parts of Southern Africa.  Around 37% of households live on less than $1/day and about half are below the national poverty line. As a small and relatively undiversified economy, heavily dependent on foreign markets, Lesotho is very vulnerable to shocks. It is also ill-equipped to deal with them.

Quote of the Week: Ahmet Davutoglu

Sina Odugbemi's picture

“There are three types of leader in this region. Those who see change as a must and want to lead and manage it;  those who accept the need for change but who are following rather than leading in the hope of gaining time; and those who are resisting change. The third category will disappear, the second can get by for a time, but only the first category will survive.”

-- Turkish Foreign Minister Ahmet Davutoglu.  As quoted in Financial Times, “Turkey’s newly faltering foreign adventures”, by David Gardner, August 16, 2011.

Evaluating the World Bank’s ICT activities: What IEG got right and wrong and what can be done in the future

David McKenzie's picture

The World Bank Group provided $4.2 billion in support to the ICT (information and communications technology) sector over 2003-2010, including 410 non-lending activities for ICT sector reform and capacity building in 91 countries. The World Bank’s Independent Evaluation Group (IEG) had the unenviable task of trying to answer whether all this activity has been relevant and effective.


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